Say no to Debt for a good life
Are You been struggling with debt for a long time? well, it’s time to plan for reducing debt as financial problems will not give you happiness and may lead to unwanted stress. So, let’s discuss ‘say no to debt for a good life’.
Don’t panic and put your worries aside. Everything is possible with proper planning and strong execution. let me help you to give some tips to get rid of your debts and these tips may help you to become more powerful than what you are today!
The debit is like a kind of slavery; one needs to get rid of it as soon as possible. So, you may need to sacrifice now to secure your future.
Before getting into the creative tips that help you to reduce your debt, have a look at below and understand where you are. have some notes honestly to aggressively attack against your debt and to understand the financial strength of yours.
I hope you are ready with a pen and paper! and are you? let’s go.
- Why do you have debt?
- What is it?
- How much money you have in handy?
- What are your near future commitments?
- Do you have any recurring savings?
- Do you use credit cards?
- Any loans?
- Are you getting a healthy paycheck?
I hope you are now clear about in and out-flow of your money. Let’s get started.
Here a few ultimate steps you can take towards reducing your debt
1.Review your spending pattern
To effectively manage your income, it is always good to review spending patterns on a monthly basis. Try to avoid more spendings for luxury and spend to meet real needs. track your spending for a month and see where your money is going.
Key rule: Don’t spend more than half of your earnings each month and lure to online offers.
2.Plan and decide where to reduce your expenses
Have a clear idea of your expenses each month, you can find out the must needs and where you can cut a bit.
- Avoid the second coffee!
- Unwanted drives
- Alcohol spends
- Reduce smoking expenses, it is even good for your health too.
- Think about unused subscriptions
- Cut your mobile phone expenses
The above activities help you save a few bucks on a monthly basis and it will give a huge difference when you do it long run.
3.Create a strong budget
Budgeting is very important as it helps to understand what exactly you can afford. This is where you need to be wise and create a strong budget to fight against your debt odds effectively. Allocate your income as per priority and importance. Follow the below priority list if you like
- Home needs
- Personal expenses
Priority category 1: Savings (30%), Invest (10%), health (15%)) Priority category 2: Home needs (20%), Personal expenses (5%), Kids (10%), Travel (10%)
4.Prioritize your debt
Prioritize your debt repayment wisely. Follow the below order if you like. You need to identify and categorize the creditors as per interest are and prioritize accordingly.
Key rule: High interest to Low interest.
- Credit cards
- Personal loans
- Home loans
- Consumer loans
It is better to settle the credit towards credit cards first and think about remaining loans as per your convenience
5. Consolidate your debt and concentrate.
It is always good to consolidate your debt to achieve one of the below to reduce the interest costs.
- Transfer your debt from higher interest rate creditor to lower the interest rate creditor.
- Consolidate many debts into the single one (preferably with lower interest rate).
- Avail balance transfer option if you get it at the lower interest rate.
6. Make the best repayment plan
Effective Planning is easy f you effectively plan and execute the 3rd and 4th points. Don’t miss single EMI and try automating your payments it using technology.
7. Set goals and ride them well
Setting goals is not a tough process but riding them well is. Define your own goals to get rid of debts as soon as possible and ride them well.
8. Downgrade your mobile
Try to opting the lowest best plan for your mobile usage. If you have internet in your home to try opting out a minimal package for your mobile which can help you with unlimited calls and some MB’s of data.
9. Cut the rents if possible
Try to reduce your spending’s on rent part your requirements and discuss your plan with your family before taking any decision on it.
10. Stay out of luxury
Don’t think about luxury until you get adequate money. Live simple until you get rid of your debt completely. Don’t buy and do the below with the borrowed money.
- Dine with friends
- Luxurious trips
11. Negotiate and win
Learn the negotiation techniques to get a discount on retail the price. Negation is an art to save your money. It is all about asking and getting for a better price. Remember that negotiations are key to savings.
12. Must give a try to follow the below at scale.
Credit cards, It is good to avoid credit until it is very much necessary. Don’t utilize the complete credit even if you have any credit card. Loans, Never take loan until or unless it is really necessary and important. Avoid frequent movie outings. Avoid new cloths unless it is important. Don’t go for any new debt to clear the exiting one. This one of the thumb rule. Try cook at home and avoid dine in expensive restaurants. It is good for your health too. Avoid alcohol consumption and quit smoking. Switch to a cheaper internet connection as per your requirement. Sell the stuff that you use often. Try to create one passive income based on your capabilities, interests and skills. Try to reduce the taxes legally. Try to use public transport for shorter distance and trains for long distances. Carry a bag when you leave home for groceries and home needs. Don’t buy a car and try to use ola, uber or renting a car. Try to get coupons and win the battle
Final thoughts :
Remember that adding debt is like adding extra burden and pain to your regular life. Your personal finances are very important to your future. Financial literacy and good decision-making skills can help you to save from financial problems. the bad financial management may hurt you. So, ‘Say no to debt for a better life’.
Seek professional consultation if required and have a better life with full of joy and fun.
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