iSavta | 23.01.2022

Do your debts weigh you down?

 

 

Are you constantly worried about your financial liabilities?

The good news is that there are actually several things you can do to experience debt relief. The first step is being aware that you need to do something.

Here are the 7 important steps you can take to find your way out of debt and have your finances under control all over again:

1. Say No to New Debt

Pay for things with cash. Credit is risky. Studies reveal that using credit cards tempts people to spend more. When they use credit, people don’t feel as if they are spending their own money. However, the truth is that they are actually spending their money and more.

2. Be Satisfied with the Things You Have

Advertising fuels today’s culture. Spending more time watching TV makes you spend more than what is necessary. If you look at catalogs and magazines more, you are also enticed to spend more.

Shopping more leads to more expenses in the end. When you limit these influences, you can enjoy more benefits, such as curbing your spending.  

3. Look for Additional Income

For most people, their regular jobs don’t produce sufficient income to cater to their needs even when they try to spend wisely. If this is your case, you can think of some side hustles to help you make some extra income. You can then use this additional income to lower or eliminate your debts completely.

4. Schedule Debt Repayment for Every Creditor

Getting out of debt doesn’t simply happen by accident. It is important to make systematic repayments and track the process. Doing this will not just let you determine what works because at the same time, this gives you a sense of achievement when you see your debt starting to diminish.

Determine the debts that should be paid off first. There are two factors you should use when making this decision and these are the interest rate and the size of the debt.

5. Put Your Debt into Writing

Establishing a written budget will help you plan and analyze your expenses to help you identify the areas where you can cut back or lower your expenses. This is one of the most effective ways to bridle your tendency to spend on impulse.

6. List Down Your Liabilities

It is actually surprising but there are a lot of people who don’t even know what and how much they owe. This is why it is important to list all your liabilities together with their respective interest rates. Analyzing the rates for every debt will make you see that credit costs can vary a lot. This step also helps you prioritize your debt reduction.

7. List Down Your Possessions and Assets

Make a list of all the things you own, including furniture, car, house, and others. Evaluate this list to check if there are assets that you can live without and can be sold off. It might also be time for you to change how you look at possessions.

Being debt-free isn’t easy but as long as you take the steps above, you can embrace a new and better life ahead of you!