Control your finances and get rid of debt

Debt: One thing we are afraid of. Everyone is eager for financial freedom, but few people achieve their goals. Poor money management is the biggest problem, especially in terms of debt liabilities. For most people, debt is a way of life. The basic definition of debt is money borrowed by one person from another. According to this definition, debt will never be bad or bad. However, there are two types of debt that are not good and good. Bad debts are money that cannot be recovered. Good debt can help you make money.

You can't live without good debt, because that's how you will succeed. In order for you to be financially free, you must learn how to repay bad debts without their influence. Bad debts are the money you buy by borrowing money, buying clothes, cars, holidays, jewelry and other luxury goods.

In order to eliminate bad debts, you need to do two things; limit your expenses and have a formula for repaying debts. Everyone has a formula for repaying debt. Here are the six steps you can take.

Make a record; this may not apply to everyone. This is just the formula I used to pay off bad debts.

first step

Stop accumulating debt:

The first step is to stop accumulating debt. When you find yourself digging a hole, stop mining.

• You need to limit your expenses. This means thrift. Most people think that frugality is a bad thing. But if you want to get out of debt, you need the economy. Write down your costs and try to eliminate the charges you can't use. Write down austerity measures and save money every month. Commit to this process because your life depends on it.
• Never impulse shopping. Impulsive shopping is the reason for people to fall into debt. You need to control your own desires.
• The joy of being late. If you seek short-term satisfaction, you will pay for it for a long time. Never buy a luxury with a credit card, you will only dig deeper into your debt.

Second step

Consider your debt

You can't handle things you don't know. So you need to take into account your debt. This is the hardest part because you have to be loyal to yourself. You also need to indicate the amount you owe. Make sure you also remember how long it takes.

E.g:

1. Credit card debt is $2,000 and the minimum payment is $200. This means that you will need eight months to fully repay the debt.
2. Your school loan amount is $3,000 and the minimum amount is $300. It takes ten months to complete your payment.

You need to list all the debts, including the debts you owe to your friends and family. They may not need a refund, but by paying your friends will help you develop self-discipline.

third step

Start paying off your debt

Once you have listed the list, you need to repay the debt with the least number of months. If you pay off your debt, it will motivate you.

the fourth step

Continue to the next debt

Bear the next debt and repay it with the least number of months. This is a tricky part; getting money from the first debt and adding this new debt. For example, spend the first $200 you pay and add $300. In total, you will pay $500. This means that your second loan will cost you six months instead of ten months.

the fifth step

Looking for another revenue-generating channel

Finding another source of income is important to you. It is not necessarily very time consuming. A part-time side show is perfect for you. The idea is to raise an extra amount, from $50 to $100. Additional cash will be used to repay the debt. It will help you pay off your debt faster than you expect.

Step 6

Pay for yourself

Most people don't pay, but if you don't, you won't be motivated. It makes sense to pay off the debt first. However, if you do not make the first payment of your own discipline, you have no incentive to pay off the debt. What is your motivation? Yes. When you pay yourself first, the pressure to pay back the creditors will allow you to come up with different solutions to pay off your debts.

In order to pay off your own, you need to start small. Bring three piggy banks; one for savings, investment and one-tenth, then deduct 30% of your income or the amount you are satisfied with and deposit it in a piggy bank, ie in three banks 10%. After each month, deposit the money into your savings account and investment account. Very money, give it to your favorite charity or church.

If you can't pay yourself first: repay the debt you are under pressure. Once stabilized, start paying for yourself.

Paying yourself will help you develop self-discipline.

Design your own formula

This is an example of what you can use to pay off debt. If you are uncomfortable with bad debts, you must work hard to pay off. The first few months encouraged thrift. Limit your expenses.

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