Plan Your Way to a Debt-Free Life

With the onset of the health crisis around the globe comes the struggle in the economy of most countries. As the economy affects business and the consumers a great percentage of the consumers applied as much loan as they can get just to get through these hard times. These loans became long standing debts that ballooned into an amount that is harder to pay because of the interest. Debts stemmed from expenses that we could not include in our monthly budget like home repairs, car maintenance, emergency hospital bills, sudden death in the family, educational expenses and some other unavoidable costs that may arise in our everyday living. As all of these necessities are part of our daily lives we have to deal with these even if it means borrowing money from any available lenders. 

Most of the debts nowadays come through credit cards as they are the most convenient and readily available channel that we can get easy cash and can be used for all purchases that we may need for our home and personal needs. The problem from having various credit cards is that we tend to spend more than we need and with a big enormous credit line it’s just so easy to get as much items even if some are not necessities. Soon this will become a problem as we may not be able to deal with the billing statement from the bank creditors. 

The real problems begins when our monthly payments for our debts takes up more than half of our monthly income. This happens to most people and I’m pretty sure that it’s the cause of anxiety and stress for most people with big debts. With this is mind there are things that we can do to settle our debts and bring our finances to good standing.

1. Analyzing Your Financial Situation and Comparing Expenses Against Your Income. We should study about the portions that we should allot for all our expenses. Remember the Spending Plan Pie Chart that we learned from school where we divide 100% to all our expense categories like Housing, Transportation, Living Expenses, Savings, Debt, Insurance, Education, Utilities and Other Miscellaneous Expenses. Percentage depends on your status in life, your needs and priorities. 

If you’re renting or paying for your home mortgage you should allot the right amount for it but if you already own your house you can just plan some amount for repairs and maintenance. If you have children who are still studying you should put adequate percentage for tuition fees and other school fees. Same goes for other categories and it varies depending on the size of the family and the monthly income. 

2. Setting Priorities. We should set our priorities and make a list of our basic necessities and the things that we want to buy if we have extra budget. This way we can easily budget our expenses in the right perspective and eliminate unnecessary expenses that will burden our spending plan. 

3. Knowing the Origin of Your Debt. Analyze where your debt comes from. Are you burdening yourself with high interest from lending institutions? Or do you have too many credit cards that entices you to buy unnecessary luxury items. Debts can come from house and car mortgages too and you should analyze if your debts should be managed properly to avoid high interest. You can read and visit some financial sites to view more  ideas on these things. 

4. Organizing Your Debt and Setting Up Goals to Achieve Lower Debts. Make a list of all your debts and try to learn more from some financial experts on how you can consolidate your debts to lower monthly payments. Debt consolidation is a good start to organizing your debt as it merges your multiple debts into a single debt which will allow you to pay only one bill and think of one monthly deadline with lower monthly payments as well. 

It takes not only money to reduce your debt but good planning ideas as well. Planning comes easy if you have someone who can assist you on your debt consolidation needs. Click here  for guidance on setting up your goals on reducing your debt and try to learn about the pros and cons to fully understand what you’re getting into. They offer fast money solution to get personal loans from a nation-wide marketplace of lenders and lending partners. Funds will be deposited directly to your bank account and you can pay all your debts instantly reducing your various debts to only one debt which you can manage easily. 

So think about this opportunity as a better way to unload your financial anxiety and stress and make your first step to a debt-free life.