Debts are simply excess baggages that will slow you down in your journey to financial freedom.
Therefore to get out of debts, you need a solid plan that can help you through the process.
The reason i said solid plan is because many at times, the plans we set don’t actually fly not because they are not good but because the discipline to make it work isn’t there.
This article i will be showing you tips that can make it work for you.
1. Make a list
Before you can say you want to get out of debts, you must have been in debts before hand.
You therefore need to make a list of the debts you sre to pay for example student loans, bank loans, credit card debts and so on.
While making up that list, you need to account for the percentage interest of each amount borrowed and obviously the actual amount borrowed.
When you have that list sorted out, you can then priortize them on which one gets settled. Most people settle their debts from the least amount to the highest amount.
2. Start effective budgeting
Before you can get out of debts and gain financial freedom, you need to set some budget for yourself and business.
To do this you need to think about cutting down some expenses that could lead to excess spendings like getting luxury items that could harm you financially.
Other expenses you can look into cutting down could be your budget on grocery items, cable bills amomg many other things.
While doing this, let your aim be to save up specific amounts every week and eventually you will realize that you don’t end up in debts when you are doing your financial accounts.
3. Set up an emergency fund
This is a wise way to get out of debts or not be in debts at all. For this tip, you will have to set aside a particular amount consistently for a period of time then when that time elapses you can then use that money for when an emergency situation comes up.
Be aware that this emergency fund isn’t any money you use when you run out of cash but instead it is a fund you use when a serious financial need arises all of a sudden.
4. Start paying down debts
There are times when you have spent all you saved up for and even your budget isn’t enough for you. In the process you incur debts and for that you need a plan.
One good way to go about this is to pay your debts one at at time and not all at once.
This is what i mean, let’s say you have about 3 debts to pay up.Pick them one at a time, doing this will make you more focused on clearing up the debts and not when you you divide the money into all the debts you have.
Once you have cleared up the first debt and there are someleft over money, put it in the next debt so you can finish up in time.
When getting your debts paid or when trying to avoid staying in debts, you can employ several approaches in which getting something else doing is a good suggestion to start with.
When i mentioned that you find something else to do, i meant getting another job. A second job can go a long way in helping your debts sorted out in time.
6. Try to remain debt free
In a bid to stay free after you might have settled all your debt, you need to set some boundaries on how you spend your funds. Don’t just spend as you get your money, adequate planning should be done for you to be sustained financially and not go into debts.
Read, practice and share