When you are in debt, especially when you have a large debt, you are rarely at ease. Yes, your payment may be up to date, but there are always concerns in your mind that will keep you thinking about the worst. What if you are fired or lost your job? If you are injured, how do you have to miss a lot of work? How do I save for my future goals when all my salary is used to pay the minimum amount?
If this sounds familiar, then you are not alone. The current debt of millions of people seems to be consuming their bank accounts and wallets. However, there is hope. This is not easy and requires a lot of attention and discipline, but you can eliminate debt once and for all. Let's take a look at an action plan consisting of only three steps and it has proven to be the best way to eliminate debt.
1. Accurate current status
First, you need to know your debt, the remaining balance, the minimum payment amount, and the current interest rate. Create a list with this information and the company you are in debt. When you're done, arrange the list in one of two ways.
One way to list is to use the balance. Start with the account with the highest remaining amount and follow the lowest balance in the list. Another way to create a list is to use the same process, but start the list with the highest interest rate account. Continue the list until you are sure that you have not forgotten any debt.
To help you determine the best way to create a list, ask yourself two questions: Is the amount of the remaining balance fairly high and how much payment do you have to pay? If you still have a large amount of money to repay, please use the interest rate method. By eliminating the highest interest rate debt, you will save money in the long run. However, if your balance is low to medium, please use the balance balance method. Once you have eliminated the maximum debt owed, you will have more funds to apply for debt reduction.
2. Arrange your funds
With the checklist, set aside enough funds to pay the minimum payment for each debt. Use your remaining funds to apply the additional payment amount to the debt at the top of the list, in other words, to pay two payments. If the minimum payment is too high and you do not have enough funds to pay the extra fee, please move your list down to the debt you can pay for the extra fee.
Yes, you can continue to use the remaining funds for your debt balance at the top of the list, but our goal is to repay your debt, not to repay the debt. All of this will become clearer later.
3. Set and start and knock out ' em Down
Once you start this plan, move on until your first debt is fully paid off. When it disappears, you can get funds from the amount you no longer own and apply it to the next debt on your list. If you have to skip the highest debt, go back and see if you have enough money to pay for the two payments. Continue to pay off your debt in this way until you completely clear your list. Soon, you will accomplish what you thought was impossible, and you have eliminated your debt.
Does this program sound familiar? It is often referred to as the "debt snowball." No, I am not saying that this genius is my creation. I just said that this is the best way to eliminate debt without causing economic difficulties. Keep in mind that if you have a hard time earning the minimum amount, you will have to look for additional sources of income to start the program or seek financial advice to help by other means.
I hope you enjoy this article and the information provided can help you achieve financial freedom. Please feel free to leave feedback, I like feedback.
Orignal From: The best way to eliminate debt
No comments:
Post a Comment