To people who have debts, we all know that a huge pile of debt is so heavy to carry! It’s not a good situation for anybody. Before you stress yourself on thinking on how to pay your debts, these are some tips that can help you save from a huge pile of debt:
– List down all your debts
Make a list of your debts to manage them easily. Find which debt you should prioritize. You must prioritize those nearing the due date.
– Always review all your income and expenses
It is important to know how much you earn and how much you spend in a specific period. You should be able to balance the money coming in versus the money going out. This enables you to audit yourself.
– Look for ways to boost your income
Nowadays, there companies hiring freelance employees who can work from home within their available time. Usually, they pay for every accomplished task. There’s a lot of opportunities to help you boost your income!!
Settling your debts
– Pay more than the minimum
One of the most attractive things about using a credit card is that you have the convenience of paying just a small amount of your balance each month until the balance is completely repaid. You may be tempted to take advantage of this convenience and use your money for other things. While the minimum payment is certainly easier to make, it typically costs much more in the long run than if you pay your balance in full.
– Highest Rate First Strategy.
In this case, you list your bills in descending order of interest rates. You will send the minimum amount to everything but the highest rate, and send whatever extra you can to that one. By doing this, you will minimize the interest you will pay over the life of the loans.
– Use your extra money to pay the debts
If you have extra money that you can use to pay off your debts, use it. It’s okay to pay the debts before buying new stuff that you don’t need. It will help you reduce your debts.
Staying free from Debts
– Live within your means
Be wise in spending your money! Be a wise spender PLEASE!! Avoid unnecessary debts so to reduce your financial obligation. Purchase only on what is in your budget list. Discipline yourself and keep away your eyes from the latest trend!
– Build your emergency fund
After payday, try to allot even 5-15% of your income for emergency funds. You can use as a backup when an unexpected incident happens such as job loss, medical emergencies, unexpected travel, etc.