How To Conquer Your Debts
Life without challenges would be incredibly dull. Without any of these challenges, we would never learn to grow as a person. Learning is a process of knowing what is right and wrong, so this means repeatedly making the same mistakes would make you a foolish person. At some point in time, borrowing money is a requirement in your life. It could be due to an emergency case, such as life-threatening illness, or simply loaning from the bank to buy the things that you’ve always wanted.
As debts continue to increase without your watchful eye, it can cause setbacks. Surely you’ll ask yourself – “How am I going to be able to pay and find ways of overcoming debt?”. There is a big responsibility in overcoming debts. It is a requirement and insanely important asset in building yourself as a person. Thus, if you begin to only do the things you need and avoid unnecessary wants you will free yourself from having a pile of debts.
There are only a few people that are truly debt free, and some were able to conquer debt in the right timing of their life. But if you are still in this situation and you seriously want to balance everything out in your life, here are the following ways for overcoming debt and trimming down all of your unwanted expenses as well.
Overcoming Debt – The Basics
- Learn the difference between a good and bad debt. A loan is not a bad thing if you want to invest in something that will benefit your future… such as a house, car and/or a business that you wish to start. However, mixing it with other expenses such as accumulation of credit card debts like buying (unnecessary) clothes, groceries, and appliances can add to your debts if you are not paying it come due time. In this case, you should learn to balance your priorities in life and capitalize on them. Perhaps make a goal to limit your expenses every month. This is one way for you to discipline yourself from buying the things that do no good for you.
- Cut the cost of loans- beginning to cut your loans will eventually lead you to a more debt-free life. It gives you the peace of mind that you’re able to stop loaning and learn how to budget your money in a sense that you know what you need and less of the wants. Stop borrowing money you don’t need! Also, consult with a finance professional to consider consolidation (if you have a lot of loans) or refinancing (if you have astronomical interest rates).
Always keep an eye on the interest rates. It’s the difference between paying $11,000 over the course of the loan or $20,000+
- Paying your credit card- monthly bills that come along with paying your credit card should be prioritized. Both are very important for you to pay. Credit cards typically have really high interest rates compared to other loans, and should be prioritized first.
- Pay your mortgage early—one of the biggest loans that one person can ever do is to pay his mortgage. As much as you want to be debt free, make sure to keep in mind to pay earlier than the usual given due date. This will give you more confidence and peace of mind that you are not attached to any debt. Plus, you can compound the payments, which will reduce the overall interest paid on the high accumulation loan.
- Overcoming debt- of course, everyone wants to experience this type of financial freedom and for this to happen is to focus on paying off all of your debts seriously. You need an action plan and a focused strategy to do so. Don’t just continue to play the waiting game and hope it all works out. You’ll be going bankrupt.
Overcoming Debt – Credit Card Problems
“Once a dream and now it became a debt.”
One principal reason why most people end up having debts is because of the material things that you see every day and the endless desire to purchase them. There are others who became “shopaholics” due to the use of a credit card. There are many reasons why you need a credit card, but that does not mean that you’ll have to overuse it in a sense that you can no longer afford to pay it off.
Credit cards are useful monsters, especially when you use them intelligently. Using a credit card for such things as churning, or for the special benefits/cashback is just smart financially. If you can save 3% on every purchase… why wouldn’t you? But don’t mistake this intelligence for going into insane levels of debt because of your overabundant desire to purchase bulk orders of Twinkies. You have to play it smart.
Being financially free and stable is something to look forward to everyday. It gives you a sense of confidence and a peaceful mind because you won’t be spending your money just to pay your debts. Here are the following basic ways for you to quickly limit overspending and using of a credit card.
Limiting Overspending
- Start setting your goals – you have dreams to build. Something that you’ll look forward to everyday and make it as a life goal! Realistic goals are one thing that you’ll need to discover for yourself. And this is the best way for you to achieve whatever it is you want to gain in your life. As you set goals the less you will be spending on unwanted materials that you used to be bothering with.
- Putting your credit card on ice- only use it in case of emergencies. Do not ever break the ice if you have not paid all the necessary debts. Don’t break the ice if you haven’t exhausted every other option. It would be best as well if you are conscious enough in regard to your expenses. This means you would lose out on any bonuses given from credit cards, but it is still highly worth it if you are an “at-risk” borrower.
- Prioritizing- indeed there are a lot of things that you’ll need to prioritize and one of which is paying these debts. This is another way in helping you with overcoming debt. Prioritize the credit card payment above all other expenses, as it likely has the highest interest rate. Ensure that it is always paid off (monthly) first.
- Trimming your expenses- one factor that you’ll need to understand are your needs and wants. Yes, both of them are somewhat the same in a sense that the approach makes you think that you desperately should have them in your life. However, you don’t need the brand new Keurig, whereas you do need the emergency medical treatment. Trimming your expenses will make you more responsible for weighing down your options.
- Create a monthly plan- being organized with your financial welfare will surely help you with overcoming debt. Setup a plan and try to stick to it. Monitor your expenses and income generated. In this case, clear off things that are not beneficial and keep the things that are advantageous for your needs. Each month, you’ll see that you have saved more money than the norm. The purpose of monthly expenses helps you become aware with all that you had to spend. This will give you a track record and help you see your spending habits, which may be influencing the add-on to credit card problems.