Believe me: you are not the exception. Brazil currently has 62 million defaulters. An alarming number, which can harm all your financial objectives in the short, medium and long term. So we created this guide to getting out of debt hassle free.
In the following topics, we have put together some elementary tips for you to settle outstanding debts gradually, allowing you to start planning to get out of the red for good!
You will learn how financial education can be fundamental in your daily life. It is used to control expenses, know the impulses and also to save you according to your goals. Check out the tips we’ve separated for you:
- Write down all your expenses;
- Have goals;
- Evaluate affordable leisure options;
- Assess the possibility of having an extra income;
- Negotiate with creditors;
- Pay attention to higher interest debts;
- Change buying habits;
- Have an emergency reserve.
Why have financial education?
Financial education is the awareness you acquire to avoid impulse purchases and, especially, to understand the proportion of income and costs you have, month after month.
Thus, financial debts are rare, allowing your routine to be enveloped in less suffocation, tightness and all the symptoms common to the financial stress.
The first step, then, depends exclusively on you, checking the tips of our guide to get out of debt without complications!
Also, leave the reading of our post where we talk specifically about relationship between your health and financial stress, after finishing this article 🙂
How to use the guide to get out of debt?
Below, we have some tips that may have everything to do with the moment you are living, facilitating your familiarization with the alternatives that will help you to eradicate your financial issues!
1. Write down all your expenses
To begin with, consider your guide to getting out of debt as an element guided by the balance between your monthly income and your spending. And this should be done, initially, by assessing all the costs of the past few months – from three to six months past.
Thus, it is easy to understand what were the fixed expenses (such as internet bills, telephone, rent, etc.) and variables (such as the weekend trip, dinners out etc.). And, through annotations, you understand exactly where your income is going.
Based on this, it is easy to understand where to stop the “financial wounds” by cutting the most superfluous expenses.
2. Have goals
Is your goal to end debt? So, use the previous tip and check how much you spend, per month, and how much can you save. Putting the accounts in balance, you direct part of the income to settle the accounts and, in this way, you have a specific goal and deadline to get out of debt.
If, on the other hand, the idea is to abandon unnecessary costs, use the notes to define what they are and, with that, compose a budget that allocates part of your resources to settle debts and, consequently, reduce impulse spending.
3. Evaluate affordable leisure options
Do not think that you will stop having fun by following the tips in this guide to get out of debt. Some tips are elementary for replace an expensive activity with a more affordable one.
For example: instead of abandoning trips to the cinema, find out what are the most inviting days and times. Or, even, start undertaking film sessions at home – with the right to popcorn and everything.
If you like concerts, check out the free performances in your city that month. I.e: you can find some kind of leisure and fun while your budget is more focused on ending debts.
4. Assess the possibility of having an extra income
How about touring your property to understand which items are no longer useful to you, but can generate extra money that month?
Or, still: what talents and skills do you and someone in your family have, and can you supplement your income? Through these activities, you are able to streamline the process of reducing debt continuously – and, who knows, you may not find a new possibility of undertake?
Party sweets, cakes and snacks are good examples that can help in the composition of a extra money and fast, or even cutting and sewing services, online classes etc … It is worth keeping an eye on the possibilities to scare off interest and late bill fines definitively.
5. Negotiate with creditors
Get in touch with creditors and negotiate discounts and better payment terms. This can help both to reduce the final value of the debt, as it allows a relief so that interest does not accrue if you respect the new payment term.
Then, take the opportunity to renegotiate debt and discover how this activity can be as beneficial for creditors as it is for creditors.
6. Pay attention to higher interest debts
Every debt has a particular condition: it can be a higher interest rate or even better discounts if you pay it off ahead of schedule.
Only for you, it’s interesting focus attention on those whose interest accumulates quickly and in less time. After all, the snowball quickly accumulates with this type of situation.
To do this, list a ranking with the debts. This allows you to visualize which are the worst, and compose a strategy to clear up overdue accounts with the worst interest, first.
7. Change shopping habits
Is the supposed must-see supermarket promotion really a must?
Make it a habit to research before making any purchase. Sometimes, impulse buying can be harmful – especially for those who do not immediately need this product or service.
By waiting for a while, this acquisition can naturally be more affordable in a few months. Not to mention that the research may present you with a competitor that offers the same thing, but with an even better price.
8. Have an emergency reserve
Finally, our guide to getting out of debt allows the creation of a preventive condition for any debts that may arise: emergency reserve.
After all, no matter how much you compose a budget and know how to handle impulse purchases, unforeseen events occur. And, if you have a warranty reservation – preferably, invested in an easy withdrawal option – these problems may not evolve into long-term debt.
Want to know more tips to turn debt into a simple memory that you can’t wait to forget? So, like our page on Facebook and take the opportunity to follow us on Instagram and in LinkedIn! There, we post news daily that may be of interest to you!