To pay off debt, there are many behaviors that the consumer can include in their routine. And some of them are so interesting that they can even be adopted by people who have no debt in order to maintain their healthy financial life.
We know that debt is an unpleasant reality, but it is very likely that at some point in your life you will have to deal with it. So good to be prepared.
Thinking about it, in this text, we have selected some tips that will help you plan to pay off debt, avoiding the most common mistakes of this process. Keep up!
Get organized and scale the problem
It is impossible to take any financial action and succeed if you do not have your costs and income organized. And when it comes to reducing expenses, this is more than necessary. Remember that in this process it will be very important to avoid other debts.
Start by analyzing your fixed and variable spending, use a spreadsheet or write down all this information about your financial habits. The main point here is to have control and know how much you have to settle your debts.
Define priority debts
Once you get organized and know how much money you have, it’s time to face your debt. Make a list of all, also defining the total values, the installment numbers and the lender.
In case of Bank loans, be sure to consider the CET (Total Effective Cost) of each, which defines all the extra debt charges.
The ideal is to organize the list from the most expensive to the cheapest. Then define what will be the first debts to be paid. We advise you to start with the ones that charge the highest interest or are the most expensive, so you avoid accumulating and becoming a snowball.
Negotiate Your Debts
Once you have organized and set your debts on a priority list, you can now look at your creditors to propose a negotiation. Ideally, when looking for them, you already have a proposal.
Remember that both sides are interested in solving the situation, so don’t be intimidated at this point. However, keep calm to come up with a more favorable solution, after all you are trying to solve your financial situation and not make the problem worse by trading one debt for another.
Set payment terms
After the negotiation, you will have an idea of when to pay your debts and the amount used for it. If you have a large number of lenders, this is a good time to plan the deadlines by setting a payment schedule.
Record the due dates on a calendar and separate the amount needed for each. At this point, the important thing is not to lose focus until they are settled, ie do not make other debts at least until the negotiated payment ends.
Find an extra source of income
As a way of ensuring that you will honor your commitment to negotiating your debts, look for a source of extra income. There are at least two ways to accomplish this: selling some of your assets or doing extra activities.
When you sell your goods, you give up some things you have achieved, which is very difficult. Also, you don’t always get the expected value, so it’s good to negotiate calmly.
When starting an activity that guarantees extra income, you will have to arrange your schedules to reconcile it with your usual routine, but don’t give up. There are many types of jobs possible, such as selling candy, savory, cosmetics and crafts, among others. These are simple activities, but they can guarantee good income.
We are sure that with these debt relief tips you will be prepared to deal with this situation and can soon settle your financial life. Want to keep getting content like this? Then subscribe to our newsletter!