Seven steps to pay debts

Almost 60% of the Brazilian population declared having debts in April 2016, according to the Consumer Debt and Default Survey (Peic), carried out by the National Confederation of Trade in Goods, Services and Tourism (CNC). Controlling domestic finances is essential, especially in times of financial crisis and high inflation. If you are in debt and do not know where to start to organize your financial life, stay tuned for the seven steps that we have separated for you to pay debts.

Map your debts

Map your debts

To get out of the debt situation, you need to know in detail the information of all your debts, such as amounts, payment terms and interest rates. With the information in hand, it is easier to look for options to get out of the red. Learn how to make the family budget.

Involve the family

Involve the family

In addition to mapping all debts, it is also necessary to do financial planning and control spending, organizing all investments, income and expenses. For this, all family members must be committed, considering the profiles of each one’s financial behavior.

Don’t make new debts

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This must be a priority, a challenge to be overcome by those who really want to get out of debt. Making new debts does not match this moment of financial life reorganization and feeds a negative cycle. A tip is to take the time to acquire the habit of buying in cash. It is worth keeping your credit card and checkbook at home so as not to be tempted to use them.

Seek better conditions

Seek better conditions

You should look for conditions that are more advantageous to pay debts. Therefore, prioritize the payment of the most expensive debts, renegotiate with creditors and seek better terms and terms. Debts like overdraft and credit card have higher interest rates, perhaps a loan with lower interest rates may be the solution to pay them off. The 13th should be used to pay more expensive debts, not to consume. Another possibility, if you own a car and it is not a work tool or essential for your life: sell it. In addition to reducing your monthly expenses, you can still use the money to pay off debts.

Cut spending

Cut spending

Cutting expenses is an essential action for those who want to get out of debt. Organize your spending into three categories: Waste – which you must eliminate completely; Superfluous – that you must reduce or eliminate; and Necessary – that you should optimize, looking for options. Necessary expenses are those that are essential, linked to basic needs such as food, housing and clothing. Superfluous expenses, on the other hand, are those that generate well-being and are more related to desires than to needs, such as restaurants, your account in streaming services and branded clothing.Finally, waste is an expense that neither generates well-being nor is linked to needs or desires, such as fines, to pay for something that you do not use, a light on or a faucet running unnecessarily. If you have money left, use it to pay debts.

Generate extra income

Generate extra income

Even though spending is minimized, it is possible that the budget is at the limit, but remains in deficit. Try to identify in which areas and services you have the ability to generate income that complements your budget. You can work overtime or practice artistic or culinary gifts. Who knows, maybe you can get out of debt and discover a new life option?

Seek help

Seek help

Ideally, this search for help has no financial costs. Get to know the experiences of others who have gone through a similar situation or seek help through reading, consulting or consumer protection agencies. Knowledge is an important step in ending debt.

These are seven steps that can help you overcome your debt situation. However, the key before starting this roadmap is to seek real commitment. With a combination of organization and willpower, it is possible to pay off debts.

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