5 Tips for Paying Expensive Debts

Thousands of Brazilians have already gone into debt to honor their commitments amid a scenario of lack of financial planning and severe economic crisis. Getting out of a doubt is not an easy task, but it is perfectly possible. In this article we will give you five tips for taking action and saying goodbye to debt once and for all.

1. Evaluate your financial conditions

debt

I need to face reality. Making a diagnosis of your real financial situation is the first step in solving the problem. Put revenue and expenses side by side, detect the most expensive debts, and how much you have left to pay them.

Try to cultivate the habit of writing down all your expenses. This will make it easier to find out where unnecessary spending occurs and make appropriate adjustments. Try to save on essential expenses such as water and electricity as well.

Right now, we need to count on the family’s collaboration. Expose the situation and make each person motivated to contribute to solving the problem. This will make it easier for everyone to be more understanding about budget cuts.

2. Try to increase revenue

Financial education is essential for getting out of debt. However, cuts and adjustments are not the only means of combating debt. With an extra income, you can secure a break in the budget and settle your debts faster.

If your activity is conducive to working overtime, make a more effort, at least provisionally. Another option is to leverage your skills to make money. Teaching or consulting in an area you master can earn a good amount.

It is also possible to act as a freelancer. There are even several online platforms where you can offer your services. Maybe you don’t find out that you can make a living doing what you like?

3. Use your assets and investments

The time is to get rid of the doubts! Therefore, do not think twice before using your investments and extra income to write off the outstanding balance, such as vacation, income tax refund and 13th salary.

You will hardly find an investment that yields more than its interest-bearing debts. With current accounts, it will be possible to invest more sustainably.

If you have something that can be sold, it is a good opportunity to practice detachment. It is preferable to put your finances on track and ensure that your assets are not dilapidated in the future.

4. Trade expensive debts for cheaper debts

Much of what you are currently paying on debts corresponding to interest. The credit card and overdraft account for the biggest bites in the budget. With each month you cannot settle the outstanding balance, the debt increases more.

One way to alleviate this problem and to gain breath is to exchange the most expensive debts for cheaper ones. Getting a personal loan or payday loan to clear your debts with your credit card and overdraft is a simple way to narrow the hole in the bills.

Care must be taken not to fall back on revolving credit or overdraft, as the accumulation of interest plus the installments of the loan would even be more disastrous.

5. Set priorities

There are two types of debts that deserve special attention. The most expensive ones, like the credit card, and the ones that can bring some penalty. This is the case with home financing and the condominium fee, which, if not up to date, may result in forfeiture of the property.

Once you have made adjustments to the budget, define where to start. If necessary, negotiate directly with creditors and submit a proposal, knowing that you will be able to pay for the month to honor the commitment.

While a debt scenario is always problematic, it is possible to reverse the situation by remaining calm and taking the necessary steps. By paying expensive debts, investing in financial education and never losing track of your finances.