5 Ways to Effectively Get Out of Debt
Do you constantly worry about managing your finances? Does it drive you crazy when you think about the pile of debt that you have? Do you get nightmares about paying your loans off? If yes, the following ways to effectively get out of debt might help you out.
1. Lay the details down at one place:
The first step to getting out of debt is to do the math! Sit down with all the relevant documents, your laptop if you are good with excel, or sheets of paper. Jot down everything at one place and make a chart of cash inflow and loan payments– pretty much everything from your finances to your phone bills, right them down. This will help you gain clarity of thought.
2. Form a plan that you can stick to:
A plan like paying 90% of your in hand monthly income as EMI is a bad one, simply because it is not very pragmatic. You have to understand all sorts of things you spend on, figure out your bare minimum expenditure, add a couple of thousands as buffer and then pay the rest off as your monthly debt payment.
3. Survive on only essentials for a while:
Those new Prada shoes can wait, so can that necklace that made your heart skip a beat. Till the time you are paying off debt, you need to constraint yourself and stick to a spending limit, and then ‘underspend’. It is excruciatingly hard, but it is something you have to do.
Photo Courtesy: Alan Cleaver