How can you get out of debts? Top Ways Explored
Are you grappling with a string of debts at the present moment? There are several borrowers who are faced with a similar situation. As much as you would want to wriggle out of your debts, it becomes difficult for you to do so if you are not aware of the right tips and tricks. Today, we will be discussing just the same. However, before learning about the tips to get out of debts, please be informed that there is no one single formula which works for every borrower out there—since everyone’s situation is unique. There might as well be thousands of ways to make sure that you are “getting” and “staying” out of debts. However, you might just as well pick only one or two to fight debts or just a combination of some. So, read on.
Top Ways to Getting out of debts
- Let us start with the clichéd… start budgeting
Start budgeting. Prepare an excel sheet with your earning, expenditure and savings. Have a good look at your earning and expenditure columns. Start spending less than what you want to spend. Do you know that even millionaires cannot have everything that they want to buy? Even if you have the money to buy what you “want” (and not need), you should try to keep that money aside as your saving.
- Stop adding to your debts
If you go about obtaining new debts to pay off your old debts, you will not really be able to make any progress when it comes to paying off your dues. If you stop taking new debts you will not really be able to wriggle out of your old debts but, at least, your situation will not get any worse.
- Consider refinancing your loan
Ask your creditor if he is willing to reduce the rates on the loan or not.
- Pay off your expensive debts faster
Invest time in listing all your debts down in accordance with the rates of interest. Identify the debt with the highest rate of interest. Make sure you are trying your best to get rid of that particular debt at the earliest. Once you are done with the most expensive debt you can use the money with which you have been paying this debt to get rid of the debt carrying the second highest the rate of interest.
- Concentrate on creating an emergency fund
Try and distinguish between your wants and needs. Steer clear of luxuries and use the money, thus saved to create an emergency fund. This will help you in building a safety net and keep you from using your credit card in case of an emergency.
- Save on groceries
Keep track of the grocery sale and special offers in your locality. Stack as much as you can when there are sales and you can definitely go on to skip buying grocery for the next month or so.
- Look out for other avenues of earning
Sometimes it might as well get difficult to pay off your debts simply depending on your savings. So, do look out for extra earnings. How about some freelance opportunities?
- Invest in a quality old car instead of a new one!
A new car depreciates in value right from the moment you start the engine and costs you much more than an old car does. That is reason enough for you to invest in a quality old car and steer clear from an old one.
- Consider resorting to free credit counseling
An expert debt counselor will explain all the debt relief programs available in the market and help you select which one among them is best suited to your needs.