How to get out of debt, discover what you should NOT do | Debt ConsolidationHow to get out of debt, discover what you should NOT do | Debt Consolidation
If there is something we know in advance, our debt is not going to pay itself. So if you are going through a bad economic time, you may look for some quick solutions that are not convenient at all.
In this article we will discuss what you should NOT do if you want to get out of debt:
Not having a payment strategy
We suggest that the first step is to analyze what you owe and under what conditions you avoid making bad decisions. You have to analyze who you already owe at what interest rate to pay the most expensive debt first. It will prepare a list of expenses and establish a payment and savings plan that does not affect your basic needs.
This way you will have an overview of your economy and you will see what expenses you can afford and which ones you will have to renegotiate or see where you can cut expenses.
You may have to spend a few months with the numbers in red, but taking into account the income and expenses reflected in a form will make you see your entire economy and allow you to analyze possible exits or measures to take to get out of debt. Maybe you can choose to take an extra job for a few months, cut some outings or live in a more austere way … these are all options that can help you settle your debts.
Pay the minimum card
Paying only the minimum of the card is one of the worst decisions we can make, because in itself we are not paying our debt to the bank but we are paying the interest. Paying the minimum is only business for your bank, always try to pay a little more than the minimum if you cannot pay the entire amount.
To be clear, if you continue to pay the minimum, over time the debt will continue to grow and you will end up paying much more than you should at the beginning.
You should also keep in mind that this solution is as it says in Creole ” bread for today and hunger for tomorrow ” because if you allocate the least amount possible to the monthly payment of your debt, for the following month you will have to pay the interest generated plus what corresponds to that period.
Acquire a debt to pay another
From Edmond Dantès we discourage asking for loans to pay debts, especially if they are long term. However, you can request a salary advance when the loan has a lower rate than what you are paying off your debt or when you know that with the loan you will cancel all of your debt and that in the coming months you will have an income extra that will allow you to pay the loan taken.
We hope you find this article useful!