Learn how to get out of Debt

Many people feel that it is not possible to get rid of debts by not earning enough to take them out. The task is challenging, but with planning and determination, you will be able to do it without major problems. For this, it is important to recognize your situation, to take action and to organize yourself financially so do not go through this squeeze again. See in today’s post how to get out of debt by earning little:  An explanation over at simplyzip.com

Set the total amount of your debts

Set the total amount of your debts

The first step in getting out of debt is knowing exactly how much you owe and who you owe. The process is hard, but necessary: ​​List all your debts, your values ​​(counting interest) and the respective creditors. With the total in hand, it will be easier to define how much you have to save each month to clear your debts and regularize your situation.

Create a monthly savings goal

There is no way to pay off your debts, you will have to cut costs and save money. With the full value of what you owe, create a monthly savings goal for that purpose. The ideal is to separate 15% of your net income to pay off the debts.

In more serious cases, you have to tighten the belt even more and allocate an even larger amount to be able to pay off the debts and get your current account back on the green.

Try to renegotiate the debt

Keep in mind that you just want to pay, your lender wants to receive. Therefore, debt renegotiation is interesting for both parties. Before getting in touch with financial institutions, stores and the like, it is important to prepare to already get in the conversation with a proposal. See how much you can afford and do not exceed this amount.

Exchange your debt for a better one

Non-revolving credit card debts and overdraft charge the highest interest rates on the market. To balance your finances, it is prudent to even swap debts with higher interest rates like these for others that offer more competitive rates like payroll or personal loans. Even in the medium term, this exchange will make all the difference in your budget.

Control your expenses

Controlling spending is an important step in healing your finances and effectively getting your debts back. See where your biggest expenses are and where you can cut. Start with superfluous expenses like leisure, restaurants and personal care. Consumer bills, such as electricity, gas and telephone, can also be reduced with some changes in habits. Lorna Doone can help you – in just 2 minutes you see where you are spending. Download now and see your situation: iOS and Android.

Create an emergency fund

Create an emergency fund

Having an emergency reserve is essential not to have to resort to loans in the event of an unexpected situation such as the loss of a job or illness in the family. With debts under control, it’s time to think about setting up a fund to be able to appeal if you have any unforeseen financial expenses. The ideal is that this reserve corresponds to a value of three to six net wages.

Getting out of debt by earning little is possible! To achieve this goal, it is important to stay focused, manage your spending as wisdom, and change your habits.

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