Getting out of debt can sometimes seem like a daunting task, right? There are those who think that the problem is only the salary, which is considered too low, but even if this is an important factor, there are things you can do to improve your financial situation.
Here are 8 tips that will help you improve your finances and have a better relationship with your money.
Tips for getting out of debt
Pay close attention to each of these points that can help you improve your financial health and get out of debt:
1. Know how much you owe
If someone asked you how much you need to pay off all your debts, would you be able to tell the full amount? Knowing how much and to whom you owe is critical to maintaining your financial health. It is the first step in getting you out of debt.
But how can I know that? If you don’t have a spreadsheet with your budget, start doing it right now. List everything you owe, how long these debts will last (how long they will be in case of installment payments), what types they are (essential, seasonal, etc.), and the value of each. If you are paying interest on any of them, already count this amount as it will be part of what will have to go out of your budget.
Knowing what these values are and where you are spending your money, it is easier to plan and eliminate unnecessary costs.
2. Challenge yourself!
Set monthly savings goals and always challenge yourself to increase this amount to pay off debt. Offer to save, for example, 15% of your salary to pay off your debts. Do this until you get past your debts and then use this money for an investment.
3. Debt Exchange
Have you heard of debt transfer? Basically the idea is that you trade a high debt you have for a smaller one. But how to do it? It’s simple. Instead of paying interest on your revolving card or overdraft, choose lower interest credit options. The personal loan is a good option in this case as you do not have to give a guarantee or have a consignment.
But it is important to highlight here: Do not take a loan without knowing the interest rates, CET and check your conditions to pay the monthly installment .
4. Control the situation
If you want to get out of debt and achieve financial health, you need to be in control of your debts, to know what your expenses are. Always keep in mind what your main expenses are and keep priorities in mind when making new expenses.
Avoid impulse shopping. Always research and think twice before buying something you don’t need at that time.
5. Have your own emergency fund.
You may have heard this many times, but it is still worth remembering: It is very important to have a cash reserve for emergency situations. This saves you from having to resort to more expensive alternatives to solve a situation where you need to spend more than you planned.
Have debts? Seek to renegotiate the amount payable. You may be able to lower interest rates.
Want to buy something? Ask for a discount if you pay cash. You may be able to save money and use the difference in something else important.
7. Avoid going out with a credit card
If you are trying to save money, try leaving your credit card at home. This avoids impulse purchases and helps you get to the end of the month without spending more than you could.
8. Learn about investments
Investing is not a seven-headed animal. You can make your money yield more by putting it in the right place. So always try to read about it, watch videos about it and ask the people you trust about it. This will help you multiply your equity.