Many people often ignore their financial position, assuring themselves that everything will be solved only to themselves.
Such thinking often leads to a hopeless situation full of debts. A key item in seeking exit from debt bondage is to confess to yourself that the problem is REAL.
Think carefully about whether your bank is helping you or makes it difficult for you to already have a problematic situation. It is better if your bank teaches you how to save money and rationally spend it.
How fast is it to get out of debt?
Debt is on all sides, payment on installments, current account minuses, credit cards, car loans, apartment… Most experts will agree that today’s indebtedness of individuals and families is greater than ever before. The question arises as to whether anything can be done to quickly improve their situation? How to get out of debt?
There are many things, but you must have the will and be determined. Nothing happens overnight, but persistence is solved. Move from smaller accounts and debts to bigger ones. It makes no sense to think about repaying a big loan immediately if you owe it to last month’s directors.
- Make a list of debts. Sit down on a computer or with a pencil and paper, and make a list where you all owe money and how much. As well as the amount of interest you pay for it. To many, this is the hardest step, which is persistently delaying because it is afraid to face its situation. However, the fact that you do not know how badly you are financially stand does not mean that there are no debts.
- Pay your bills regularly. The next month will be even harder, and you will continue to draw debt. There are also reminders and tightening interest. The first step is to pay these bills monthly and on time. In this way you will know more clearly what is left of your money.
- Most interest rates are likely to be paid on credit cards and on a minus in your current account. Since the amounts are smaller, and the interest rates begin to crash these debts the most. If you have more cards that have the lowest interest rate or the smallest fee, use only one and of course as little as possible. In the meantime try to close other cards or at least reduce the debts on them. In this way, you will have better control and insight into debt. Pay overdue rates on cards and loans on a regular basis. Most financial institutions charge bills and charge default interest for each delay.
Is there a good debt?!
The debt generally implies that you have borrowed some money that you have to repay over a certain period.
Good debt, by the same general definition, would be one that leads to future benefits, new values, while bad debt is one that becomes a financial burden and limits a person, and you no longer have any benefit from it.
It is important to distinguish between these two debts so as not to prevent yourself from advancing.
Therefore, when you hear that someone has a problem with a refund, do not automatically conclude: “It’s best not to have a credit at all”. That’s not true.
Even the world’s largest firms are taking loans. They allow them to invest, to expand and to become even better.
Bad debts are most often those who do not have a longer-term benefit. Especially those whose repayment term is longer than the deadline for using the purchased items. These are almost all debts for consumer goods.
If you are in debt due to a shoe, let it not last longer than three months, because you will need new things, either a new jacket or sunglasses for the next year.
Credit cards and consumer loans are often considered bad debts.
The reason is that most often they buy things that have no long-term value, nor do they have a longer period of benefit.
You’re probably paying this month for a card rate, and you do not even remember what you bought and you’ve already spent that long ago.
In addition, they have the highest interest rates. Such a debt is almost always bad. Purchasing on credit cards means that you consent to spending future money, one that you do not yet have and you have not earned, on the things you are using now.
When, after a certain amount of time, debts are increased so that you cards and wages begin to close old debts. There are interest, reminders … You feel like cards are paying off debts on other cards.
Also, all debts relating to short-term increases in satisfaction or standards are poor.
As a rule, bad debts are the ones you are returning after having used something (the rates you pay for the vacation you have already been), and good debts are those who help you to progress (the amount you paid for education).
How do you get out of this? Start spending less than revenue! Pay the card with the difference.
In time, insert the saving item into the current income. In addition to repaying the debt on the card, it is also important to balance the repayment of debts from the past (through cards, credits) of enjoying the present and saving for the future.
It is not a solution to close all the cards and not have a credit.
But it is important that it relates to long-term things. And that you always spend money for savings.
How to get rid of debts?
The only way to get rid of debts is to temporarily live in moderation and in accordance with your abilities.
Defining the budget is the first step. On one side, note all the financial abilities you have, and on the other hand, expenses.