Some keys to follow to get out of debt without dying in the attempt
Debts are part of anyone’s life. We use them to build heritage, travel, study or for any emergency. What to do to get out of them if they accumulate?
List the debts
The first step in getting out of debt is to be clear about how much is owed, in what products, to whom the family was borrowed. Start by ordering the debts from high to low. The largest must be paid first and then the others. Another way that can work is to list them for the highest rate at the lowest interest rate.
Follow a method
There are various strategies to save and make a budget. You can find methods to save money, others to leave an amount of your income in the service of debt. Some famous methods are even famous as kakebo or nowball’. This will help you organize your budget. Of course, it all depends on how you feel without debt, because there are even studies where they conclude that having debts offers some psychological advantages.
Take care of the expense
It is necessary to be clear as a rule of thumb to never spend more than you earn to ensure good financial health. In addition, it is important to give priority to the fulfillment of the main financial responsibilities, such as the payment of invoices, which is recommended, must be total and on time.
A recommendation that, although it seems difficult, is easier to apply than is believed. To achieve this, it is advisable to have liquidity to cover current expenses for 6 months, being cautious of any future situation that may arise. It is always essential to have sufficient savings or long-term assets.
Pay more than the minimum
If, as you change jobs (people who change more often after employment, improve their income compared to those who do not) raise the salary, check before buying more things, if you can pay your credits faster. Remember that in Colombia there is no penalty for making advance payments of bank loans.
And last but a really important one, return every credit card payed.