The moment of truth has arrived: yes, is your financial life in good shape messy and your debts got out of hand. Admit the first step in acting towards a solution. That said, It’s time to get your hands dirty and start your journey towards a healthy financial life.
Want to get out of doubt Follow the following step by step:
How to get out of debt? – Find out the total amount due
Contact all your creditors to find out the exact value of your accumulated debts. If in doubt, a good alternative resort to credit protection agencies, such as the Agree Bank or Across Lender Group, to find out which companies asked for the inclusion of the your name in the debtors register.
It also raises other debts, such as condominium and rent arrears, in addition to amounts borrowed from friends and relatives. Time to reverse this situation now. Do not leave anything out of this survey.
How to get out of debt?- Map your monthly budget
After you have calculated the exact value of all your debts You need to map all your monthly expenses to see how much money you have. Tue available to renegotiate debt installments without compromising your essential expenses (food, health and transportation).
A tool that can help in this process Good Lenders, which automatically pulls and categorizes all your expenses made on the debit and credit card. In addition, the Pocket Guide offers graphs that will help you understand where each real went to. spent in the month. Thus, it is much easier to identify where it is possible to spend less to finally get out of debt.
How to get out of debt – Rearrange your monthly expenses
After mapping all of your monthly expenses, time to set spending targets to reorganize your expenses. One of the most effective ways to do this applying the 50-15-35 rule. It works like this:
- 50% of monthly income intended for essential expenses such as household bills (electricity, gas, telephone), transportation, food, education and health;
- 15% for financial priorities : in this case, your top financial priority right now settle your debts. Then, the next steps, in order of priority, should be: create an emergency reserve, make a pension plan and invest in the long term.
- Should the remaining 35% be earmarked maintenance of your lifestyle, which includes all the activities of your daily life that make your life lighter, like cinema, gym and dining out. Remember this the category that has the greatest potential to cut spending, if you need to set aside more than 15% of your income to renegotiate your debts.
How to get out of debt- Renegotiate your debts
Now that you j mapped your budget and reduced spending, already able to identify how much of your income can be directed to pay off debts. So instead of accepting the first offer from creditors, make a counter offer: for payment view, negotiate a good discount on interest and for payment in installments, propose installments that fit your budget.
If there is no agreement with the financial institution, a good option borrow money from a friend or family member. That way, you can you pay off life view at a discount and refinance it at lower interest rates with the closest people.
How to get out of doubt – Build an emergency reserve
With your debts under control, Time to start saving part of your income to build an emergency reserve. Is that mattress fundamental to prevent us from the adversities of life, so that we do not need to enter the overdraft each time we are surprised by a fine, unexpected medical expense or even in those months when we spend a little extra on the credit card said.