Discover actions you need to take to improve financial health The month of January 2020 registered at 65.3% the percentage of families with credit card debts, overdrafts, postdated checks, payroll loans, personal loans, store booklets, car installments and home installments. So it is relevant to learn how to get out of debt using simple and effective methods. A drop from the end of 2019, which registered the figure of 65.6% in December. But, an increase compared to January 2019, when the indicator reached 60.1%.
The data are from the Consumer Debt and Default Survey (Peic), released in February. It is a high number that reveals that the financial health of the Brazilian is in the background in the priorities of everyday life. So if you’re wondering how to get out of debt, keep an eye on these tips and start now to get out of the red:
Organize your budget
Bad debts – those made without any planning – are born of the unknown. If I don’t even know how much is in and out of my checking account, how can I even save any money? Can not. Because if you have a messy family budget, you can’t get out of the red. So it is important that, above all, you have a complete sense of how your financial life is now.
Take a quick look at your statement, it is common for banks to present data regarding your spending, some of which are even divided into what kind of things you spent: pharmacy, supermarket, bar, gym. Set up a spreadsheet to use every month and write down your earnings, expenses and what debts you have. This overview of your financial life will be essential to making the right decisions.
Pay the highest interest debts first
Many people are so mired in debt that they don’t even know where to start. Prefer practicality. Assess what are your most critical debts, those with higher interest rates and great chances of accelerated growth if you remain in default. They are the ones you must pay for first. Try to negotiate with the institution you owe, a sincere and realistic conversation can reach a consensus for both parties, after all, the other side wants to receive what you owe. After settling debts and making your choice of priorities, it’s time to make sure that all deals are paid.
Perhaps you think that if you are in debt it is wrong to take out a personal loan as this is theoretically to acquire another debt. In fact, if the loan is applied for based on serious planning, your situation may start to change. With platforms like Credit Cream Lend you can do everything online and still compare interest rates and installments. Depending on the amount you can request, you can pay all debts in cash and with that you may be able to get good discounts. Your payments will be concentrated in one place and with cheaper interest.
Beware of cutting unnecessary expenses
In this process of getting out of debt, you need to know that some efforts will need to be made. If things are not going well it is time to change, but pay attention not to make any sudden changes. Start to cut unnecessary spending slowly. If your life changes patterns overnight, it is much easier for you to give up after a short time. So be patient with yourself and cut those expenses over a few months. What you can do right away is to renegotiate some plans and try to pay less at all, before cutting them.
A little extra money is always welcome, but don’t think it will fall from the sky in your pocket, you need to have a waist game to use your creativity and be able to earn extra money at the end of each month. Use your natural talents to find freelance jobs – the famous beak – or even invest in new businesses that are profitable and need little money to run. Private classes, beauty salon service at home, fitness lunches, personal shopper, dog walker and many other options can help you get your extra income quickly and effectively.
Avoid impulsiveness to get out of debt
Your great challenge in this path is to transform habits that led you to an unbalanced economic life. One of them is spending on impulsivity and this needs to end. Make purchases with awareness and planning, the trend is that over time you will be able to educate your mind.
Improve your Score
The Score is a kind of score in your “good paying resume”. Once you are paying your trades on time, your name will be removed from the defaulting list. Your efforts should be to increase your score in this Positive Register, the best placed ones will be closer to 1000. How to do this? Paying your bills on time, sometimes even anticipating these payments and keeping your data always up to date at the institutions that collect information to feed these scores.
The more you have a plan in mind of what you want to achieve in your future, the easier it is to not get out of line and reach your bigger goals. Create small goals and unlock your list little by little. Define something bigger that you want to do when your financial life is in the throes: take a vacation trip, buy a house, make an exchange, change cars. Until you get there, win smaller goals: be able to save on something, finish paying a bill, earn extra money each month. With something you really want waiting for you on the other side it will be even more thought-provoking to keep your name clean and keep the bills in the blue.