How to get out of debt without dying in the attempt

Prepare a budget

The first step to take control of your financial situation is to know how much money you spend, and then define the amount you can use to pay your debts. Make a list with the total amount of your monthly income, then fixed expenses (rent, tuition, gas, electricity, telephone, etc.) and finally variable expenses (transportation, entertainment, clothes, shoes, etc.).

Establishing a detailed budget that accounts for all your expenses, however small, will also allow you to determine where you can cut them. The most advisable thing is that you start by reducing unnecessary tastes and expenses, without this meaning that you will stop having a good time, it is not that you no longer spend, only that you do it in moderation. For example, you can reduce the number of times you go out to the movies or eat, cancel, pay television, or reduce your mobile phone plan.

Pay more than the minimum

To get out of this complicated situation as soon as possible, you must dedicate as much money as possible to the payment of your debts, and it should be enough to cover the minimum amount and a little more.

Consolidate your debt

This option allows you to group your debts into a single account. Check which bank offers you better conditions (CAT, lower interest rate, etc.) and ask to transfer the balance of several credit cards to a single plastic, in addition to having greater control of your payments, this will allow you to save commissions annual Not all Financial Institutions offer this benefit, so ask the bank of your choice if you manage the program and under what conditions.

Save the cards

If your goal is to stop continuing to borrow, avoid using credit cards at all costs. Leave plastics stored in a safe place, or if possible, destroy them to eradicate the temptation to use them and get used to making all your purchases in cash.

Restructure your debt

Compared to consolidation, the restructuring seems at first glance more advantageous, because the lending institution can reduce the amount of your debt and even eliminate the interest generated by it. However, the negative side is that it will leave a bad record in your credit history, so it will always be better to pay off your total debts.

Request a fixed payment plan

This option allows you to “lower” the amount of the payment you must make each month; the benefit is that the interest on the debt will no longer generate interest. This facilitates the sum of the debt in a much shorter term than if you only made the minimum payments. Usually, Financial Institutions handle conditions ranging from 6 to 60 months. It is essential that once you establish this plan with your creditors, you do not reuse your cards since otherwise, you will increase the amount of your debt again, and you could fall back into an insolvency situation.

Make your card your best ally

If you know how to handle them, credit cards are one of the best credit options, since they allow you to finance yourself for up to 50 days without paying an interesting weight. In addition to this, they offer you some benefits such as generating points with which you can pay your annuity, obtain airline tickets, or have travel insurance. They also allow you to direct the payment of services, which saves you the transfer to a branch. 

For more help on debt relief or payday loan relief you can visit online.

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