Too many of us have been in this position. I remember going through divorce with legal bills, living off credit cards, finding rent deposits, borrowing from friends and family. It was a tough time and I got through it. When you are in the middle of that storm it seems it will never end.
Have faith and ask for advice. People will help when they can. If anyone starts to blame you for your financial woes just walk away from them; they are not friends they are ghouls who feast on misfortune.
So let’s think – Getting out of debts when you actually have large amount of outstanding balance creeping up can be overwhelming. Such large debts, wondering how you’re going to get rid of it, can lead to great stress. Trying to pay your debts and never accrue additional amount can be more stressful and inconvenient for most people. This is why it is basically essential to make paying off debts your main priority.
Realizing the real importance of paying for all your debts first should always be your priority. This realization will definitely lead you and offer you the opportunity to make your dreams of being financially stable and debt free becomes a reality. Your main goal should be to have your finances under full control, not the other way around. Once you’ve taken the right step of making your finances your priority, you’ll become more aware about how much you’re spending every month and how much you’re able to save.
Pay Off Your Debts and Live a Debt Free Life
Everyone wants to live a debt free life, but the question is how? In the current economy situation nowadays, it’s extremely difficult to live a life full of debts and at the same time manage a family’s expense. So, you need to take action immediately in order to pay off your debts. The most effective way for you to live a life free of debts is to create a good budget plan. Follow this plan accordingly and clear your balances.
If you want to know how to devise a plan, here’s how:
Know all your debts:
This is the first important take to take towards creating the plan. You should definitely identify your current debt situation in order for you to be debts free soon enough. Carefully, go through your loans, credit card statement, and other debt statements that you may have. Calculate these amounts that you owe on different loans, cards, etc. and know the exact full amount you need to repay. Though you may be surprised with the total, however, the idea is for you to discover how much you owe exactly so that you’ll be able to make some arrangements accordingly.
Once you’ve totaled the amount you need to pay off, you have to prioritize payments. Consider which debts you will need to pay off immediately, and which debts can be paid later. The best step to make if you actually have lots of debts is to select those with higher interest rates. With this, paying off smaller debts will be easier for you. Some people, however, think the exact opposite. They tend to prioritize smaller debts and leave the bigger ones behind.
Devise a plan:
After establishing the priority list, it’s time for you to devise an effective plan. A payment plan will be able to help you pay off those priority loans much easily. So, try putting all extra money for loan payments. If possible, you can even make double payment in order to lessen the amount of repayment. In terms of the smaller debts, you can always make minimum payment until you’re able to pay them all. One of the plans for personal finance which I really like comes from T.Harv Eker. He calls it the ‘six jars’ and it is great – I have taught lot’s of people this method.
For you to keep a debt free life, you can always consider automatic repayment system. One of the best ways to make a timely repayment of debts is to create automatic repayment of debts from your own bank account. This can actually save you lots of time, and can also assure you that all payments are paid on time.
Some of this may seem unrealistic. It is always best to have a goal to work towards rather than flounder in a sea of hopelessness. Find out about Good Debt and Bad Debt – see Robert Kiyosaki’s definition.