5 tips to break away from the debts
A man in debt is the modern version of the slave. Today most people are looking for options that allow them to reduce their debts and save some money. You may settle your debts and learn to live your life within your means. I am sharing 5 tips to help you live free from debt:
1. Stop using credit cards
One of the main factors that will lead you to increase debt is when you make purchases on credit that you can not really afford. When you realize that you are unable to pay the bill but make the minimum payments on all your cards, that increases the burden. Minimum payments will guarantee that you’ll stay in debt because every month interest keeps increasing your debt balance. A debt of $5,000, may even take 22 years to pay it. Buying things on credit is nothing but a trap. Looking for the options to avoid those hurdles? The easiest option is to pay by cash for the things you buy. If you want to make an expensive purchase, save first and then buy that. I always recommend that buy only those stuff that you can afford now to avoid future obligations. You might think that this is a stupid idea, but believe me, you will avoid many problems caused by debt.
2. Pay by cash only while purchasing luxury items or gift
Everyone has a list of luxury items that we want to buy, but using credit cards to obtain those things is a very dangerous route. You’ll enjoy more these items when you pay by cash and you will also avoid paying interest because buying on credit makes you pay the interest along with the EMI or Payment plan. Avoid such debts that limit your budget and make your life complicated.
3.Create a realistic budget that includes money for the payment of debts
The first step toward controlling your debt is to create a monthly budget within which you can maintain. If you think a budget limits you, I can tell you from my experience that a budget gives you FREEDOM. When you successfully manage a budget, you know exactly where your money goes and you can create a plan that allows you to continue to buy the most important things in your life. Your budget should take into consideration all aspects of your lifestyle, including your home expenses, food, general maintenance, payment of services, fun, and of course the payment debts. If your budget does not make room for the payment of debts, there will never be enough money so that you can recover from debt. Take control of your financial situation by creating a realistic budget every month. This is the tool I use to stick to a budget and see my assets grow. Soon you will see that your debts have decreased and your savings have started to grow.
4. Look for Professional help
The best way to ensure you make the best financial decisions is to seek professional help, such as a financial advisor. But beware, many sellers of financial products only benefit the product owner. These called advisors can put you in a risky situation. Ask them as many questions as you can, to find out you have come to the right person and he/she does know about personal finance, and if hesitate or refuse to answer, don’t hire. One of my first rules is to NEVER accept financial advice from someone who has less than my possession. Investigate good for your advisor and if not allowed to investigate it, better do not hire.
5. Negotiates better rates with banks to pay off debts
Many people assume that there are no options and simply accept all the increases in interest rates that occur every day in your credit card/debt. Usually, there are always some options. Speaks with appropriate people in the bank. You’ll be surprised at what you can achieve and that the bank is willing to do to keep you as a customer.