Many people are clueless about their financial status. Most of the people are just living by opting for instant gratification rather than investing and making their future more secure. In order to gain this financial instant gratification, people opt for debt. Most of the people do not even spare a single thought as to whether they can afford that debt or not. This has resulted in a financial upheaval for most people as they are not able to get out of debt. After a while, these people just try to search for the magic solution to get out of debt. If you really want to get out debt, we would today share with you 4 simple steps which you can follow in order to do so.
1. Creating a list of outstanding loans:
The 1st thing which you have to look into is to have in writing the current outstanding payments which you owe. You have to also calculate the pending amounts in various loans. You can create this list in Excel sheet or you can create it with the help of pen and paper. You have to include each and every small detail like the name of the financial institution, the amount which you pay monthly, the pending loan amount and the interest on loan amount. When you are able to write down all of these things, you would realize the total debt which you have.
2. Opting for low-interest loans:
When you make that list, you would be able to find that some of the loans are pretty expensive that is the interest rates on these loans are pretty high. These loans typically are the unsecured loans like credit card loans. You have to pay them off as soon as possible and consolidate your various loans into a single low-interest loan. This would ensure that your monthly outgoings would significantly reduce.
3. Monthly payment schedules:
Once you are able to consolidate your loans, you have to keep track of each and every monthly payment which you have to make. In addition to that, you have to speak with your bankers to find out whether they can allow you to extend the tenure of the loan. This would ensure that the monthly outgoing would be on the lower side.
4. Create a strategy:
In order to pay off your debt and be debt free it is important to make some sacrifices. You would have to sacrifice eating outside and other worldly pleasures in order to live a simple life and save some money for the debt repayments. Once you are able to do that, you can be sure that you would be able to make the debt repayments on a regular basis.
Only once you are able to pay off a significant portion of your debt, you can think about indulging in some materialistic expenses. Some of the expenses which you can instantly cut are:
• Cable cost
• Broadband cost
• Eating outside costs
• Vacation costs
• Family get-together costs
By cutting back on these expenses, you would be able to save quite a good amount of money which would help you in repaying the debts.
So, if you want to get out debt, it is important to follow these 4 steps in order to pay off your loans and lead a debt free life.