Debt, debt, debt... How do we enter this state and become a debtor? In the past few decades, millions of Americans have found themselves full of debt, and sadly, this trend will continue for the next generation.
Debt clearance has become more challenging as creditors realize that they can make more money by tricking people into debt and charging high interest rates and large fees. Creditors are happy to let the debt snowball, and the debtor should owe money for life.
Ask yourself, do you want to work like a dog and only provide a fixed source of income for creditors? If not, then seriously eliminate the debt.
To be sure, there are many people who claim to help you get out of debt [debt consolidation or debt clearing companies], but they don't want to see this happen. As a debtor, the harsh truth is that no one will pay attention to your interests, the best way is to help yourself.
It is not easy to achieve debt settlement, and it may take a lot of time to resolve all debts. Learning and implementing the basic steps required to get out of debt is a necessary condition for achieving financial freedom.
Monitor your expenses
Where did all the money go? Well, the simple answer is to follow the money. Monitoring your expenses can be a great help in achieving debt clearance because it shows you how much you spend. By eliminating unnecessary purchases, you can reduce hundreds of dollars from your family budget.
Reduce unnecessary expenses
The next step in your debt removal plan is to reduce your spending amount each month. Eliminate extra costs, such as buying Starbucks coffee, branded clothing, glamorous cars, and food, saving you thousands of dollars a year.
In addition to these luxury items, many people spend money on items they don't really need, whether it's because of convenience or keeping up with Joneses' pursuit of the latest and most fashionable gadgets on the market.
To achieve debt settlement, you must save more money and use it to pay off your debts.
Cut extra credit card
Take a pair of scissors and give yourself a favor. Cut all extra credit cards, except for the credit card you usually use and the lowest interest rate. If you continue to charge a fee each month, you will never pay off your credit card debt.
If you have an outstanding balance, the final cost of using a credit card to pay for the item may multiply due to financial charges, interest, and any additional charges to the credit card issuer for that account.
If you are unable to pay for the purchase in cash, you should wait until you have enough money to pay for the item without using a credit card. Instant gratification has led many people to the path of the financial crisis.
Disciplinary action on debt repayment
Let us say that you have completed the above work, but after a few months, the impulse to return to recklessness. Impulsive buying has destroyed your debt removal plan and you are back to the original point.
This is a huge waste. Remember that debt removal involves discipline. You must give priority to debt repayment. Any "extra" funds after the expense must be used to repay your debt.
If you stick to this group, you will see the fruits of your labor. Your debt will decrease, and if you actively reduce expenses, they will disappear faster.
Start a savings account for urgent needs
While repaying debt, don't neglect to start a savings account for urgent needs. One of the main reasons people are caught in debt is because of unexpected expenses. They must take a starting salary loan or charge the credit card to resolve the issue.
There will be accidental expenses such as roof leaks, car repairs, and enough cash to prevent you from getting into debt.
Orignal From: Five tips for achieving debt clearance
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