All people suffer from having debts at some point in their lives. No matter how much they want to pay such debts, the continuous rise in the prices of commodities hamper them from doing so. As of today, it is almost improbable to find a household that does not owe anything to someone.
To be able to get rid of debts, a person must have some sort of plan to accomplish it and ample time to put the plan in place. Furthermore, some sacrifice must be made like skipping dinners with friends and opting to stay the night than hang out with them. However, such sacrifice will prove to be worthwhile when a person finally realize his goal of having a life free of debt.
When trying to get rid of his debts, a person may start by following the listed guidelines.
Assessment is a very crucial part in paying off debts. A person must have a clear understanding of how much money he owes and he should make a list of priorities regarding the debts that must be paid off first. Some people may opt to pay the debts which have higher interest or they may choose snowball method where a person clears the smallest of the debts first before moving on to the bigger ones. Such method allows people to see the progress they make as they pay off their debts starting from the lowest levels.
DETERMINE THE ROOT CAUSES OF DEBTS
Even though they are able to calculate the amount of money they still need to pay, most of the time, people have no clear idea on where they are spending their money. Treating one’s self to some fancy place a few times is sure to slowly drain a person’s pockets and before he realizes it, his debts are piling up.
Keeping an eye on where a person spends his money will give a clear picture in identifying things that are not that necessary in people’s lives and as such, may not be bought in order to save more money.
Yes, the good old budget planning. Budget planning is still the best way to ensure that monthly debts are paid off. Using cash is very helpful in adhering to a person’s budget plans. Weekly allowances are also recommended as long as a person can refrain from withdrawing or borrowing more money when he has already spent his allocated budget for the whole week.
SEEK FOR ALTERNATIVES
Some people may be tempted to subscribe to the widely popular debt consolidation services. However, people should be very careful when considering such services because they are not free.
Another thing that a person can try is the balance-transfer credit card. Here, a person’s credit card debt is transferred to another card with zero interest for a certain period. The highlight of using such method is that a person can pay off a large chunk of his debts without any interest for quite some time.
BANKRUPTCY IS NOT AN OPTION
Filing for bankruptcy should be at the bottom of the list of strategies for getting rid of debts. Not only does it hurt a lot, but it also does not necessarily change a person’s outlook in paying off debts.
LET LOVED ONES KNOW ABOUT THE PROBLEM
This is especially true for married people. If a couple do have an agreement when it comes to their expenses, then it will put a strain on their relationship. Being married to a person implies working together to resolve certain problem even the financial ones.