Get out of debt as a climber
In these years as a financial planner, I have been receiving a lot of messages from users asking how to get out of debt. Whenever I reflect on this, the answer comes in a simple but very enlightening way: the secret lies in certain actions that will make it easier for you to handle your debt.
What do I mean by that? Well, if you have ever had any debt, you could witness the feeling that the problem is so great that it seems to have no end. Here comes discouragement or the fear of dealing with it.
Think of the debts as a great mountain, which to reach its highest point, will be neither by helicopter nor with the adrenaline of parachute jumping. But, with the effort of a climber who after much study and preparation has achieved its goal.
So we believe that this is the secret. Breaking into small attitudes, instead of looking at them as a single giant, we have managed to tread a path to freedom – and that makes all the difference. Here are some steps to how to do:
Do not know where your money is going
Ok, let’s take our fear off and start dealing with the facts. The most important of them: how much you are spending every month and where your money is destined.
Action 1 : List all your expenses, whether they are from the credit and debit card, which can be accessed by the bank statement, or paid with cash, which should be noted for a month. Once this is done, organize all expenses in items such as: Leisure, Supermarket, Transportation, Education, Personal Care, among others. This will take a few minutes and give you a concrete idea of your monthly budget.
You are spending more than you can
This is a difficulty for many of us. The various advertisements that show the happiness of having such a product, brings us an illusory feeling that something is missing. However, a new car or branded clothing will hardly make us happier people. These expenses could disrupt our budget and be a starting point for our debts.
Action 2 : Examine your behavior and think about how you can change. One tip is to remove the facilities that make us spend more. Leave the credit cards aside and forget the overdraft. Prioritize debit, prepaid or cash cards.
The most interesting of this challenge is to look for new ways to have fun without spending too much. Do you have any tip?
Do not know which debt to start with
This can be one of the most important tricks to getting rid of debt.
Action 3 : The first step is to list all the debts and order them according to the interest rate and importance, such as debts of the account of light, that must be treated first, because if they are not paid there will be a cut in the supply power. Once this is done, look for a renegotiation, check with your lender if you can get some credit that covers lower rates like paycheck credit or a secured loan. That way you can save a lot of money just by trading your expensive debt for a cheap one.
Does not have enough income
One might even think that this is a big problem, but these days we can do small things that can increase our income considerably.
Action 4 : Do you know a lot about a particular subject? Likes to cook? Do you have any hobbies? Imagine selling candy and savory to friends, giving classes on something you like or even reselling some product. Let your imagination flow, you will probably find some opportunity.
Do not be disheartened with your debts
This happens when we come across that giant mountain, where it is not possible to see the summit because it is covered by a dense fog. Often this uncertainty causes people to turn back, which is totally unmotivating because they were on the right track.
Action 5 : Motivation is something complicated, but what I’ve discovered is that it’s small things that make you motivated: your family, your life goals, the challenge of winning. Whatever your strength of will, use it as the key to your motivation. Make an “inspirational picture” with pictures of your family, friends, places you want to visit, phrases; Write down your goals (buy a home, retire, travel). They are simple actions that will keep you motivated.