In some provisions, borrowing is really necessary. So says Yuri Mosh, the founder of the company “Russian America” and “Second Passport”: “When they say that all of America lives in debt, it’s not about the thoughtless debt that is characteristic of most Russian families. Debts or loans are not so bad, it’s important to simply correlate several factors: why do you borrow, what resources do you plan to repay, what is the price of this loan, what is its share in the budget ”.
However, in most cases, loan obligations become an unbearable burden that should be disposed of as soon as possible..
1. Start giving
Debts alone can only accumulate, and not disappear. To get rid of them, give up new loans and gradually repay old ones. Do not try to give away at once the entire amount, which makes up most of the income – this is the way to increase debt. Determine its acceptable size in advance. Nadezhda Sendetskaya, transformational coach psychologist and business coach, advises: “Take life in your hands – start paying off debts in the amount of 20% of any amount received”.
To understand what part of the income you can donate painlessly, start creating a personal budget. Enter the loan repayment expense item as a separate item. If surpluses are formed at the end of the month, then also give them as contributions.
Yuri Mosha clarifies: “If you borrow to keep up with your salary, then you have a poor budget for your family budget. Carefully analyze the structure of income and expenses ”.
2. Decide on spending priorities
If there are debts, large purchases should be postponed. An expert of the Financial Health project, independent financial consultant Olga Polishchuk, says: “Do you want to go on a trip, buy a car, save up for education, a wedding, make repairs? Define goals, calculate their future value and find the appropriate pace of movement. Get yourself a “dream album”, paste the images of everything that you want to have and that in the future should become a part of your life. Go to the store with a list of necessary purchases. Plan any waste, wonder if it is necessary? Learn to make informed financial decisions that will improve your life, not only now, but also in the long run ”.
Do not buy expensive things when repaying loans. They will draw money for themselves, which will help to get rid of debts at an accelerated pace. Running costs should be cut. Refuse to buy essentials is not worth it, but consider replacing them with cheap counterparts.
Remember – the main thing is to pay off current debts and not get new ones. And you can pamper yourself after being released from financial obligations.
3. Learn to save
Calculate your spending. If you constantly monitor finances, it becomes clear where most of the money goes. Pay attention to small purchases: takeaway coffee, unnecessary clothes, equipment accessories. Oksana Tverdokhlebova, an expert at VIGTrans, says this: “Accounting for little things is a must. It is a waste of money on little things at the end of the month that will come to you in a round sum. Develop a habit of accounting for expenses, it’s more convenient to do this in the application ”.
Keep track of promotions and bonuses offered by various brands. Cards with cashback, discounts on products and promotions – a way to save.
3. Have a supply of money
The creation of a “piggy bank”, which can be addressed in case of need, will help get rid of debts. When spending the amount from an inviolable account, you must be aware that you will have to return the funds.
To form financial savings, save a certain percentage. Allocate 5% of profit to such an article. Further increase the amount.
Irina Dolinskaya, psychologist, author of books and the Triumph of Liberty game, advises: “Start with 1% and gradually bring this amount to 10%. When a substantial budget accumulates start investing“.
Alexey Novikov, Head of Marketing, Otkritie Management Company, adds: “After a deep analysis of your financial situation, calculate how much you can defer or invest. For this we need data: the sum of all assets and their location, the amount of monthly “net” income, the amount of monthly expenses and a list of financial goals in priority order ”.
4. Find new sources of profit
Think about getting extra profit and passive income sources, about the ways we wrote here. Make investments, but only when they are not an expense, but another source of profit.
Invest in yourself. Go to courses, get additional education, which will help to get a raise. So Oksana Tverdokhlebova believes: “Learning new skills will help increase income. Informal communication with participants in trainings and seminars can change lives, business connections will open new sources of income ”.
Olga Polishchuk says: “Become an effective employee, engage in self-development, take the initiative, find a part-time job. Sell unnecessary material resources – clothes, furniture, electronic appliances, children’s things – sell them and use the money received for savings. In my opinion, a reliable way to defeat debts is to accumulate capital ”.
5. Refuse from further lending
Eliminate regular family loans and bank credit cards. Interest-bearing loans will lower the quality of life and budget. Their repayment may be delayed. This is also confirmed by the words of expert Oksana Tverdokhlebova: “Loans are an eternal debt hole, which must be abandoned or if you took a loan, then repay it as quickly as possible”.
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