Who wants to be in debt? But there are times when debt is unavoidable. Let’s just say if an emergency situation such as for hospital fees or for children’s education costs that urge us to owe.
The only problem is that it becomes terrible when we are in debt for consumptive things, such as credit card installments, for example. In fact, the phenomenon of having debt is so ‘normal’ that it has become a joke, “Life is less challenging if you don’t have debt.”
Yes, having a lot of debt doesn’t mean it’s a fixed price, that having your own house is just a dream. To get out of the problems that surround you and at the same time realize your dream of owning a home, you need tips for managing finances for people who are in a lot of debt. Well, for those of you who already have a lot of debt but still have a strong determination to be able to buy a house, watch the following video guide to managing finances for people who have a lot of debt.
Before we get into tips for managing finances for people who are in a lot of debt, the explanation in this article will be divided into the following points:
Tips for Managing Finances for People with a Lot of Debt
- Have an Optimistic Attitude
- Fasten your belt
- Stop Consumptive Debt
- Set Priority Scale
- Make Payment On Time
- Forget the Dig a Hole Close the Hole Method
- Find Extra Income
- Seeking Professional Help
Come on, just see the full discussion below!
Tips for managing finances for people with a lot of debt
According to Moneystrand, mastering the tricks of managing finances for people with a lot of debt is clearly important for those of you who have a lot of debt, but want to own a house. Don’t just dream, make it happen! There’s no excuse, even if you have a lot of debt. For those of you who are already in a lot of debt but still have a strong determination to be able to buy a house, consider the following tips for managing finances for people who are in a lot of debt.
Have an Optimistic Attitude
Build self-confidence and an optimistic attitude that you are able to pay off all debts within the allotted time. Never doubt your abilities because this can affect you. The worst impact, can even experience depression and worry about the future.
Fasten your belt
The next step to be free from debt bondage is to start implementing a frugal lifestyle. For example, reducing trips to the mall, eating out, and even shopping online. Forget about fancy food, just cook simple but nutritious food.
Stop Consumptive Debt
Consumptive debt is debt that is used only to buy goods whose value is certain to depreciate (decline) in the future. For example, buying a motor vehicle, electronic equipment, gadgets, especially if the payment is in installments. In conditions of a lot of debt like this, also stop using a credit card even to pay for a cup of coffee at the cafe you subscribe to.
Set Priority Scale
Record all debts so you can make debt categories, from those with the highest interest rates, debts with large nominals, to those that are soft loans. Then arrange according to the priority scale. For example, the debt with the highest interest rate is obligatory to be repaid immediately, as well as the debt with the largest nominal.
Make Payment On Time
All your intentions and efforts to pay off the debt will be in vain if the payment is not on time or too late. This is tantamount to you not showing good faith in managing debt, plus it can even increase your debt burden again. Of course, there will be a fine that you have to pay if you are late paying the installments.
This also applies to mortgage installments, especially if you are in arrears for months. If you have vehicle installments or loans to non-bank financial institutions, just for your information that they are quite strict in applying fines and sanctions. You need to be careful or debt collectors will haunt your days!
Forget the Dig a Hole Close the Hole Method
Avoid the ‘strategy’ of paying off debt by going into debt again, this will make you fall into the valley of debt even more so that it is increasingly difficult to save yourself. One debt hole may be covered in this way, but still your income will still decrease to cover the next debt.
Not to mention if it turns out that the interest is greater than the previous debt. So that when you want to buy a house you won’t be in debt again, also pay attention to the costs that must be incurred when buying a house.
Find Extra Income
One of the most effective ways to deal with accumulated debt is to look for additional income. There are various ways you can earn extra income, starting from taking a side job or opening a home business.
Seeking Professional Help
If you think your debts really can no longer be settled, then it’s a good idea to seek professional help from various institutions that do offer debt management services. So that we can understand what debt consolidation is and can pay off all debts.
Professional assistance can help you manage your debt payments in full based on your current financial condition. Look for institutions or companies that are credible and trustworthy, but understand that there are costs you have to pay. You can learn more about debt consolidation here.