We spend most of our lives being surrounded by debt. Whether it's a house loan or a car loan, let's get one thing straight: if we want to truly enjoy that particular possession, we need to create ownership as soon as possible. In trying to quickly clear our debts, however, we pursue intelligent solutions and omit the simplest of factors that can help manage it — perhaps even in an easier manner.
Hence, to manage debt sensibly, let's try to do some obvious changes first.
1) STOP: Stop adding to your debt
If this sounds ridiculously obvious and even silly to be added in here, it is. But it still needs to be said. Put your credit card away except for emergencies and live only on your debit card as much as possible. With this, you will only spend what you have. Create a budget for personal expenses every week and stay within the limits. This way, your debt payment will also reduce quickly. You will be surprised at how financially healthy you'll be at the end of the year.
2) LIST: Make a list of all your debts
Your mortgage and credit card payments are not the only payments you have to make. Include and take into account things like personal loans, taxes, and any payments you owe to other people. This will put into perspective how much you really owe.
3) ASK: To reduce and extend
Check which lenders will reduce the payment rate and extend a little time if you're overwhelmed with too much debt. Many banks will be willing to offer balance transfer options.
4) CUT: Trimming your budget
If you're in debt, your budget definitely needs a cut to make up for your debt payment. Even small sacrifices, like going out for dinner from once a week to once a month, can make a difference at the end of the year.
5) EARN: Earn more than you do right now
It's a tough option and not always possible, but it is worth looking into a side project such as selling items, if you want to reduce debt faster.
6) ADD: Add into your funds
You should never stop adding the money you've made so far into your emergency or retirement funds. You can work while you're younger to pay off debts, and you'll need that extra money when you're older and no longer working.
Remember...
Once debt-free, some people tend to lavishly celebrate and then find themselves in debt once again. Remember to stick to your budget plan and try to enjoy life within your means.
Comentarios