There is a recurring question among people who were unable to pay their bills on time and became indebted: after all, how to get out of debt?
This unpleasant situation takes away the sleep of many people, besides stimulating decisions that are not always healthy for the discharge of debts .
If you are also going through a similar situation and wondering “how to get out of the red?”, We can help. Check out today’s article 15 effective tips for getting back into financial balance .
What are debts
The concept of debt has to do with someone’s obligation to pay something. That is, debts are the accounts payable . In general, debts are not bad.
It is through them that most people can acquire some good, whether for personal use or to invest in some business. They are called good debts.
The problem happens when we get bad debts that is when we buy something on a recurring basis.
Two major causes of debt are the lack of financial control and unemployment caused by the various economic problems that hit the country.
Unable to honor the commitments made, the person becomes indebted and runs the risk of having the name included in the credit protection services which makes it difficult to carry out new transactions in the market.
Is it possible to get out of the red even by earning little?
Despite having many accounts accumulated, the good news is that it is possible to get out of debt even if you earn little .
To get out of debt, you need to face reality and identify all your debts, know what financial situation you are in and establish a value to be saved monthly.
Another tip for getting out of debt quickly , even with a tight salary is to get another source of income, preferably exploring your skills. And, of course, studying on the subject is key to not getting into debt again.
But first, know that earning little is not synonymous with debt . Regardless of whether you receive a high or low salary, what should be prioritized is balance and financial control .
Otherwise, debts arise, accumulate and turn into a snowball, as you will see below.
How does the snowball effect work? How to get rid of accumulated debts?
The snowball effect happens when you ignore that you are in debt and continue to make financial commitments that you can not honor.
Or, when you stop paying your credit card bill for consecutive months to the point where you can no longer settle the total amount.
This situation is very common and is what most contributes to the accumulation of debts. So, in order not to get to that point, it is important to get out of debt as soon as possible.
How to get out of debt quickly? 15 Tips
Putting these 15 tips into practice, you will also discover how to get money to pay off debt , be free of charges and will be able to breathe and sleep peacefully. All this in a short time. Check out.
1. List Your Debts
To know how to get out of debt this is the first step to get rid of delayed tickets .
It’s time to face your reality. Write down in a notebook all the bills you need to pay. Put not only the value but the lender, the interest rate and the due date.
This moment is important because it gives you an overview of everything you owe. It can be a bit scary because you may not have the exact notion of these numbers, but you have to face it.
The idea is not to make you feel guilty for getting to that point, but to understand the moment, to have the courage and willingness to seek a solution to the problem before it becomes worse.
2 . Use a Personal Loan to Pay Your Higher Interest Debt
Once you list all your debts, it’s time to choose the ones with the highest interest rates.
They are the ones that should be eliminated as soon as possible because the longer they last, the more interest rates increase and the more you pay when you take them off.
But how do you get out of the debts you have selected? The quickest and most efficient alternative for that moment is the personal loan . And we of Credit Lender can help with this!
This type of loan has lower interest rates than many other types of debt. Instead of worrying about multiple installments, you will only have to include in your budget a single installment, that of the loan you purchased.
3. Try to Renegotiate Your Debts
Before making any payment it is important to contact the lender and try to renegotiate your debts . The companies you owe are anxious to get paid, so they are interested in negotiating.
Do not be ashamed to request discounts , especially when you know that the interest charged is abusive.
Commit to paying only what is actually possible, whichever fits into your monthly budget. Otherwise, you may get more debt.
Remember that debt renegotiation helps to organize finances
4. Create a Personal and Family Expense Planning
The household budget should always be part of your life. Be sure to do this only when you are steeped in debt.
One of the goals of this planning is precisely to avoid spending more than you earn , making a control and keeping the expenses up .
You can use a notebook to make this control or use a spreadsheet . In this worksheet, you write down all your income, the money that comes in, and all your expenses, the money that comes out.
Write down from the basic expenses like the fair of the month, water, electricity, telephone, etc. Also include variable expenses such as buying a birthday gift or an urgent medical expense, for example.
Expenses with leisure, education, health and debt installments should also be listed.
5. Cut Unnecessary Spending
Once you list your spending on the worksheet, you will find out what those unnecessary expenses are, which can and should be replaced or at least reduced.
Analyze your pay-TV account, internet and phone plan and see the possibility of reducing costs.
Check your gas spending, snacks, and dinners out of the house that have become a habit. Analyze if you have bought things that you do not get to use, too much food and that soon get out of the deadline.
Anyway, study your budget calmly trying to eliminate everything that is not necessary.
At first glance, it may be a little difficult to have to cut back on the mall or the cafeteria, but think of it as a necessary effort to have peace of mind and clean name in the near future.
It is also important to involve the whole family in this step . After all, the positive outcome depends on everyone’s commitment.
Make it clear why you need to make cuts, stipulate a deadline if possible, and encourage everyone to save for a common good .
6. Avoid Creating New Debts
This tip should be followed to the letter if you really want to get out of debt immediately.
Once you choose what you are going to pay, negotiate with the lenders, apply for a loan and do the spending planning, be sure to not make new debt .
Your budget should be as lean as possible, with only the basic expenses and the portion of the loan repayment requested.
Do not make piecemeal purchases that commit several months of your paycheck and avoid going to places where you know you will spend.
7. Create the Habit of Trading
Consider getting a discount on everything you buy from now on.
Take advantage of price reduction offers for up-to-date payments , request the exclusion or reduction of your credit card annuity rate, haggle at the time of making the fair of the month etc.
When we make cash payments, and this should be your routine from now on, we feel safer to ask for a reduction in price.
Do not be ashamed to do this. It’s not an ugly bargain. It’s your money, you know how much you sweated to get it and you must learn to value it. This tip also holds true when negotiating debts .
No matter the size of them, ask for discount. Decreasing a little here and there you can spend less and you can use what you have saved to pay other bills.
8. Buy at sight Wherever possible to get out of debt
To know how to get out of debt is interesting to look at the credit card. The object is a very interesting medium for shopping. The famous plastic money keeps you from walking with cash in your pocket all the time, is accepted in virtually every place and takes a breath in the budget when it’s tight.
But is paying a credit card account a good alternative? Credit card is also one of the big bad guys when it comes to debt.
And if you want to get out of debt all at once, you need to learn to control your card and not be controlled by it. First of all, your credit card should not be your first choice when it comes to buying.
I’d rather do it in sight. Your relationship with money will change a lot if you start incorporating this habit. The feeling of seeing the money coming out of the wallet will make you want to buy less to save money.
Separate all the credit cards you have, list the advantages of it as a real point exchange program and zero annuity. Choose what you consider the best and cancel the others.
If it is necessary to buy something urgent and this is only possible using the credit card, avoid joining the plots to lose sight of.
9.Interview in Financial Education
Knowledge is important to everything and to get out of debt, it could not be different. When we study and learn, we know better what we are living, we discover techniques and behavior that can be crucial in changing attitudes.
So invest in financial education . Many people find that because it deals with numbers, this subject is annoying or impossible to learn, but it is not true.
Knowing more about financial education and its principles is essential not to fall into scams, to consciously shop and to learn how to repay accumulated debts that both jeopardize our lives and our mental health.
Read books and journals on the subject , search for and take free courses on the internet, learn how to use expense spreadsheets. All this will open your mind more and broaden your knowledge.
Over time, the issue ceases to be a seven-headed creature and becomes something yummy you’ll enjoy learning.
10. Define A Savings Goal
Learn how to save a portion of what you get every month. Ideally, at least 30% of your salary should be transferred to a savings account. If it’s impossible for you to save that amount, that’s fine. Save what you can.
The important thing is to create and maintain the habit of always saving . Stipulate an amount that will be saved and as soon as you receive your salary transfer that amount to your account.
You must be the first person to be paid. Do not leave to save only what is left over, because it is likely not about anything.
Another tip is to save all the exchanges left over. Do you know those coins you throw in your purse without even telling me how much you have? Put it all in a piggy bank. When you reach a higher value, transfer to the bank.
In order not to lose focus, think of something you want enough, stipulate a deadline and use the savings for it. It can be a vacation trip, the prepayment of some debt in installments, the exchange of a domestic furniture etc.
Just be sure to always leave a stored amount for probable emergencies.
11. Create Targets For Your Money
Another tip to keep your budget under control is to set goals for your money . For this, you need to analyze the monthly expenses with supermarket, water bill, light, internet, telephone and leisure, for example.
Stipulate values for what can be modified. For example, if your grocery bill usually rotates around $ 600.00 monthly, stipulate for the next month a value of $ 450.00.
To reach this goal, research prices, prefer products from other brands, make substitutions on the menu, etc. The same thing can be done with what you spend with leisure.
Reduce snacks, take advantage of public places to take the kids, and when you leave, set a maximum ceiling that you can spend. Try not to leave this stipulated value.
If you have reached the goal set for an item, be aware that you should wait for next month to start all over again. This practice makes you stronger in the habit of saving money and is more creative when it comes to cooking and having fun.
12. Create an Emergency Fund to Avoid Future Debt
The emergency fund is meant to prevent you from falling into debt again . It should be built over time, as well as savings and, as the name itself says, should be used only in critical, unplanned situations.
Examples of emergencies are the burning of some important household appliance, illness in the family, an unexpected work trip, loss of employment among others.
With this emergency cash available, there is no need to use a credit card, borrow money from someone else or get rid of some good to solve one of the problems mentioned.
13. Consider the Possibility of Making a Credit Portability
Credit portability is the transfer of a loan from one bank to another. The goal is to enable the customer to choose better and lower interest rates .
It may be an alternative for those who do not agree with the interest charged by the first lender bank.
Just contact the bank holding the contract and request the full amount of the debt, for immediate discharge, with the rebate of interest.
This amount is taken to the second bank that takes over the debt thereafter. Also evaluate this strategy to remedy your bank debt .
14.Search Well Before You Buy
Get into the habit of searching before you buy. You will be scared by the price difference that exists between one store and another, even if neighbors.
This tip is very valuable for buying school supplies, for example, but fits in everything you get.
Use the internet to compare prices, visit the stores to check up on what you want and just close the deal after you realize the advantages.
Most supermarkets offer specific days for fruit, vegetable and meat promotion. Enjoy these days to stock the refrigerator. Or visit the free fairs and save even more. And do not forget to ask for a discount.
15.All All To Get Out Of Debt
Separate a notebook to write down all your daily expenses. To facilitate the process, save all receipts and leftovers from purchases made with a credit card. To write down that coffee in the corner, use a small piece of paper to write down the value.
Do this everyday. Then add everything and pass along the total amount to your expense worksheet . At the end of each day or week, analyze everything that was spent, identify when it happened, and whether it might have been different.
For example, if you had to buy a salty snack and a coffee to eat at lunchtime because you forgot to prepare the kettle of the day, organize yourself so that it does not happen again. Worth leaving a reminder on the phone.
Can You Debt Even Gaining Well?
A lot of people think that they only get in debt who earns little. In fact, this is not quite what happens. Whether you win well or not, everyone is liable to accumulate debt. Sometimes they are only different in value.
Consumption habits directly interfere with the accumulation of debt , as well as the need to fit into a pattern that is not yours, but which causes satisfaction in oneself and in others, as well as promoting social status.
Changing cars every year, making international trips on vacation, buying clothes and other expensive objects because all the friends are doing the same can completely destabilize the domestic budget. Especially if there is no financial education.
That is why it is vital to live well within what your conditions allow, to know where your money is going and to save when you need it.
Conclusion – Get Out Of Debt By Definitely Using A Personal Loan
Are you in a tight situation and have no one to turn to? Make a personal loan with Credit Lender and get out of debt immediately. Compare interest rates and realize how much you can save by sticking to that credit alternative.
Following all the tips on how to get away from debt, you will be much more prepared to deal with your money and finally get out of debt. Get to know the Credit Lender and find out how we can help you!