How to get out of the red: 7 steps to organize your financial life

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How to get out of the red: 7 steps to organize your financial life

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How to get out of the red? That seems to be a common concern of UK citizens. ANDm 2021 the record index of 40.3% of the defaulting population, according to a survey by Serasa.

This strategy of getting rid of debt is essential to improving various aspects of life, and we are not just talking about financial relief. For the accumulation of debts can also harm personal relationships and job performance.

Many people want to learn how to get out of the red. Especially, considering that the country has accumulated a greater number of defaulters and concerns about getting rid of debts are growing proportionately.

So we’ve put together some tips on how to get out of the red so you can generate more financial well-being to your days as:

  1. Organize your finances;
  2. Get together with your family;
  3. Renegotiate debts;
  4. Create an emergency financial reserve;
  5. Have financial goals;
  6. Prioritize the highest debts;
  7. Resist the temptation to accumulate new debt.

To learn how to organize your financial life and get out of the red, see below the tips that we have separated for you!

How to get out of the red?

tips-how-to-get-out-red

Starting the month with accumulated debt can quickly translate into a chronic picture of financial stress.

Debts further divide your budget into fines and interest, not to mention making you resort to costly loan modalities like overdraft.

So it's time to roll up your sleeves and put it on paper so that your planning has order, discipline and focus to settle pending issues and even add a punctual way to get out of the red. check out

1. Organize your finances

There is no way out of the red without first organizing your finances. For this, diagnose all your costs and balance with your family income. Identify what expenses are really needed and what are the superfluous costs that are slicing your budget unnecessarily.

A tip from us on how to organize your financial life and get out of the red: retrieve your account history (such as your credit card statement and bank statement) for the past few months and understand where your entire budget went during that period.

Then, recover overdue accounts and assess the severity of the problem in numbers. You have to start this work by understanding, in detail what makes up your expenses and, mainly, how much you already have accumulated debt.

Only then, it is possible to assess the amount that must be saved, every month, to settle debts.

>>> Also read and learn ‘8 tips on how to control credit card spending'.

2. Get together with your family

Based on the previous tip, understand what are the areas that most increase the spending of the family budget. Thus, it is time to meet with the family and expose the situation to everyone.

After all, the work involves making everyone more aware – whether to control spending but also to avoid an increase in fixed bills such as electricity, water and telephone, among others. It is important that everyone is focused on the same goal: which is to learn how to get out of the red.

To help, save our article with tips for saving money on a daily basis! Thus, your whole family will learn to deal with this new behavior and habits while saving gradually.

3. Renegotiate debts

Once you know what your real financial health situation is, it's time to put some strategies into practice. And one of the main ways to get out of the red is negotiating your debts.

No lender wants to keep defaulters in their system. It is certainly a loss for them. Therefore, any attempt to resolve the situation is more than welcome.

Not to mention that many companies nowadays already have the flexibility to negotiate and propose better payment terms.

Thus, there is a way to get out of the red in a way that does not harm your new financial planning. And still without the rates and interest accumulating disproportionately to your income.

4. Create an emergency financial reserve

Instead of spending money on immediate pleasures, but which do not contribute to debt relief, replace activities. Some tips are:

  • try cooking fancy recipes instead of visiting a restaurant;
  • do cinema sessions at home instead of going to the cinema;
  • look for free leisure activities in your city.

With these little saving and save money, create an emergency financial reserve. Through it, you guarantee an amount – minimal as it may be – that will accumulate month after month and, consequently, serve as support for any unforeseen events.

Stress added to debt is one of the main causes of exhaustion currently and often it occurs due to unexpected situations. An accident or illness whose treatment is long, for example, can also put financial planning at risk.

When having an emergency reservation, you know where to turn to ensure that such situations are dealt with properly – and without falling into the red again, in that time.

5. Have financial goals

One of the best consequences of planning and organizing finances is the broad view of your situation.

For example: if you have a debt that remains renegotiated at R $ 500 and your family can save R $ 90 per month, it is certain that the debt can be settled in less than 6 months.

It is through these small financial goals that everyone in your household has to focus on. End debts one by one and then have more ambitious goals.

Without any financial pending, the postponed vacation trip may be part of the objectives for the next year, how about that?

6. Prioritize the highest debts

Check which account has the highest interest rates – usually, it is the credit card bill or even the overdraft.

It is important that you deal with these accounts first because they are the ones that accumulate the most and hurt you to understand how to get out of the red.

In addition, it is worth noting the possibility of exchanging the larger debt for a smaller one. In other words: with lower interest rates.

Thus, you quickly finish the invoice, for example, and begin to deal with the low interest on a payroll loan or personal credit.

With lower interest rates, you can plan better and your debts increase in a less impactful way, month after month.

7. Resist the temptation to accumulate new debt

After learning how to get out of the red, people tend to breathe relieved and many are in the habit of resorting to credit cards and overdrafts to make purchases that have been delayed for so long.

Then what happens? A new debt.

Some ideas to avoid this are:

  • run away from installments;
  • always keep an eye on rates and interest for each installment, if it is unavoidable;
  • opt for cash purchases;
  • always research, before you buy, in order to get better bargains.

Is behavior change, but it makes all the difference for you to achieve each of your set goals.

How the company can contribute to financial health

40% of people who have already fallen into overdraft, do it every month and it takes a lot of people to the red. But what if instead of overdraft there was another alternative coming from the company where you work?

Get to know the tool HR Consultant UKy and find out how the system that implements payment on demand works, that is, the employees of a company can anticipate part of their salaries whenever they want.

According to the average use of overdraft, employees can save more than $ 100 with HR Consultant UKy.

HR Consultant UKy can be one of the most valued benefits for those working in a company. Talk to an expert and learn more!

If you want to stay on top of other tips, teaching you how to get out of the red and get more discipline and financial education, like our page on Facebook and follow us on Instagram and LinkedIn! There, we post news that may be of interest to you, every day! See you there!

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