Contrary to what most people think, it is quite possible that you get into debt and don’t even realize the size of the problem you got yourself into.
Nevertheless, no debt comes out of nowhere. Debts are the result of our own choices and priorities. There is nothing to dispute about that.
Therefore, if we want to have a healthier financial life in the future, the ideal is to improve the quality of our choices. Otherwise, even if we get rid of current debt, new debt will continue to haunt us. And this is a difficult cycle to break when we are unaware of our self-responsibility.
How to get out of debt: 5 unmissable tips!
The truth is that few Brazilians know how to spend their money consciously. In our country, people are not usually organized financially and the result is an increasingly indebted portion of the population.
Monitoring daily spending is a habit that we must adopt to have a better relationship with the money we earn.
The mathematical formula behind this is quite simple: You should only spend what you earn. Unfortunately, this is not the path taken by most. If you have identified yourself with this situation, this article is for you!
To find out how you can get rid of your debts, no matter how much you owe, keep reading the following article.
1) Evaluate and record all your debts
First, you can’t let your debt worries keep you from taking action to getting out of debt.
It is very common for a person to spend a lot of time completing about their debt without actually doing anything towards a solution to the problem. Don’t be that kind of person!
If the debts are already there, a little more lamentation won’t make them go away. The outburst needs to be tempered accordingly. After all, you need to pay them.
While this sounds like a rather obvious tip, many people fall into this trap of complaining about their lack of money to repay their debts rather than spending their time planning how to get the money to repay them.
It is the attitude of taking the first step toward a solution. For this, it is important that you list all your debts, your values and to whom you are owed.
Here’s how you can split this list below:
a) Creditors: The creditor may be an individual or a legal entity. It is important to know to whom you are owed as you will try to renegotiate the debt at a later time.
b) Products and services: It is with money that you can buy products or hire services. This ranges from the water you drink to the fuel that fuels your car. So be sure to evaluate the products and services that are in your monthly expenses. Also consider if you can’t give up any of them to make your expenses lean.
c) Beware of the total amount: Many people have multiple credit cards to pay off all debts and thus have the false impression that they are small. This is a terrible attitude. After all, many small debts, when added together, form a total amount that can be difficult to pay.
2) Spend money on just what you need
If you are already in debt, creating new ones is not the solution. It is the time to organize your financial life. For this you will have to make some sacrifices. The idea is that you spend money only on what is really needed.
It’s not about spending less money, it’s about spending money on what is really important and necessary. When you do this, you will realize that your relationship with money will change. After all, it will be spent more consciously. It may be until you feel the difference in budget in time.
3) Renegotiate the payment of your debt
One of the most important times has come for those who need to get rid of debt. It is time to renegotiate your debt directly with your lender.
It is important, to be honest at this time and explain your financial situation. Only by revealing their current conditions will it be possible to make a favorable negotiation.
Do not fool yourself! Debt renegotiation is also in the interest of your lender. After all, he wants you to pay off your debt as soon as possible. It is not good for any business to have delinquent customers. So try to have a healthy conversation and find the best solution.
4) Make a loan with the lowest interest rate you can find
In some cases, renegotiation may not solve your problem. This is why many people resort to loans.
If you need to do this, remember to make a safe choice by evaluating factors such as loan repayment condition and its respective interest rate.
Without care in this choice, the shot can backfire. After all, we must not forget that the loan represents a second debt. And the idea of paying off a debt by making another debt is only a solution if the interest rate is really comfortable with your sources of income.
5) Leave Credit Card for a while
Especially if you are already heavily in debt, your credit card is one of your biggest enemies. Let him rest for a while. Prioritize repayment of your current debts and stop creating new installments.
The best thing an indebted person can do is to make the necessary purchases with the available money. Enough of putting off new debts while you have not paid off the old ones yet.
Now that you know the 5 practical steps to getting out of debt quickly, you’re ready to be a more conscientious consumer. Your financial life may change. Only depends on you!