How to get out of debt: A step-by-step guide

0 6

Having to run or hide from someone just because you owe them some money is not a very fun exercise. But what if you didn’t have to do it, what if you lived debt free? Hold your gasps; it’s not so shocking. It is very attainable, and if you can follow the few simple practices we’re about to examine, you can be well on your way to FREEDOM.

Here, we’ve outlined necessary steps to help you live debt-free;

READ: How to make more money solving problems

Gather your data: These include records and information that contain your bills and expenses, income and source(s) of income, credit score etc. the goal here is to get you acquainted with yourself. You have to know yourself well enough to understand your spending pattern and identify critical areas to adjust or habits to do away with.

Understand your debt: Make a list of all your debts, all that you currently owe, and how much interest rates are charged on them. Remember to include the minimum required payment for each debt. This would help you understand the type of debt(s) you owe. Understanding your debt will help you know how it happened and give you a clearer perspective on how to clear it. If you have more than one type of debt, it can be challenging to keep track, and you may find yourself always paying money and not even knowing if you are a step closer to clearing your debts. But you cannot begin to pay off your debt until you understand what the figures in your records represent.

<!–

onebank728 x 90

–>

GTBank 728 x 90GTBank 728 x 90

READ: Football: Manchester United net debt rises by 133% to £474.1million

Create a budget and debt pay-off plan: Creating a budget should have come as a first step. However, that would be more effective in the situation that debt doesn’t exist, because one of the reasons for budgeting is to make sure that you DON’T fall into debt. Having gathered your data and coming to terms with what the records are; the next thing to do is to create a plan. There are different tools you can utilize to help you. A simple keyword search would give you an idea of what to do. The budget plan doesn’t have to be complicated, create a list that you would be able to understand and stick to the program.

(READ MORE: How declining interest rates, others drive a shift in Nigeria’s investment sector)


<!– /21634543682/234989245

–>

Coronation adsCoronation ads

Lower your interest rates: The reason why people fall into debt and find it challenging to pay is due to the interest rate charged on their actual amount borrowed. You see; because you are required to pay interest rates on that money, it drags out the length of time you could payback. Negotiate your interest rates lower. Even when you may have already borrowed and started paying it off, if you find it challenging to complete payment, you should consider asking for lower interest rates. Depending on who your lender is, and how persuasive you are, you may find yourself having less to worry about.

READ: Afreximbank posts $217m net income in 9M 2020

Pay more than you have to pay: Another reason you could remain indebted to someone is when you stick to just paying the monthly required amount. Because of the interest charged on most loans, you only concentrate on paying that specific amount for that particular month. That keeps you in debt because instead of bringing you closer to clearing your debt, you are only dragging it out. Regardless of the interest rate, if you can pay more than the expected amount, you should go on to do so. It is something that you can discuss with your lender. It serves both of you because the faster you clear your debt, the quicker he gets his money back.

Earn More Money: To settle your debt, you have to go out of your way to ensure that your income supersedes your expenses. One way you could earn more money is by starting a ‘side hustle’ or taking a part-time job. In this modern age, there are more opportunities than ever, for anyone to diversify their streams of income. And most of these gigs are conveniently remote; you can run them from the comfort of your home. Of course, any human would be elated at the prospect of earning money, and when you are in debt, you just have to go out of your way to do everything possible to clear.

Curb Your Excesses: If you are in debt and you are finding it difficult to clear, evaluating your lifestyle habits could help put things into perspective. You have to be honest with yourself. If you want to pay off your debt faster, you’ll need to cut your expenses as much as possible. One tool you can create and use is a bare-bones budget. This is a strategy you can use to make your expenses as low as it can go and live a minimalist lifestyle. Live only on bare necessities and do away with frugality.

<!– /21634543682/Zenith_Bank 320×100

Zenith bank | USSD codeZenith bank | USSD code

UCAP adsUCAP ads

UBA ADSUBA ADS

–>

Jaiz bank adsJaiz bank ads

No matter the type of debt, you can always clear it. Never believe that it is impossible. Always remember to have a plan. You really cannot afford to leave your life to chance. Be intentional about every aspect of your life, especially with your finances.

<!– /21634543682/23188292 Coronation research 250×250

–>

<!–

Fidelity adsFidelity ads

–>

Stanbic IBTC Stanbic IBTC

Click here for the Source

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More