There are several reasons why someone can get into debt, often to buy something you want, for some emergency, to invest or simply because you mismanaged your money.
People get into debt because they spend more than they earn, and this is the most common reason for indebtedness, since income from buying items or services above capabilities is not well controlled.
Taxes are another reason, since on several occasions people acquire a product without taking into account the taxes they have, and the legal responsibility involved. Similarly, it happens with informal work, because the absence of a fixed income is not taken into account and there is money that is not yet available.
If for any of these reasons or others you have any debt, here are 7 tips to get out of them and have good financial health.
Tips to get out of debt
Do not spend more than you earn
This aspect is a vicious circle where it lends itself to pay a debt and another one is made for the same value, only it changes to whom it is owed. Therefore, it is advisable to cut expenses.
Normally acquiring products that are over budget increases the amount of debts, for this it is important not to purchase items that cannot be paid for or buy them later.
Reduce the use of credit cards so that money is not used that then generates interest, and if it is very necessary, use only one, no more. Otherwise, it is better to use only cash, because it is money that is physically counted and not something that must be paid later.
Although the word is read common and obvious, it is one of the most difficult. Saving means setting a budget and adapting to it. For this, it is necessary to reduce expenses and so you can have a little oxygenation in finances.
In the same way, as this habit is practiced more, it will become a good habit for a debt not to be reached in the future and even to be invested.
If for any reason you have a debt it is necessary to establish priorities. Know what expenses should be fixed monthly and which ones you can expect, to be able to get out of a debt and that this does not cover more interest.
Have an expense control
Write down all the expenses that are made monthly and compare them with your monthly income that you have. This serves to visualize what is being spent more than is due.
Decrease ant expenses
Many times the expenses incurred go unnoticed, more if they are in cash. These types of expenses are known as ant expenses, since they are small, but when they are unified they represent the majority of the monthly disbursement.
Do not consume in unnecessary products or that are not indispensable at that time. This is what we mean with items that will never be used, offers or discounts that do not suit, memberships of services that are not used or that can be obtained free of charge and expenses in excessive consumption, such as candy or soda.
Set an amount to pay the debt
Based on the above advice, it is vital to set an amount to pay the debt, write it down in the cost control and reduce all expenses to the new budget. Once you begin paying the debt it will not increase, damaging the credit record or mortgaged real estate.
Pay off debts
Finally, you should catch up with finances. Start paying debts based on established priorities. Make payments by means of a loan to reduce the interest on the debt, if you can pay a little more better, so you get out of the commitment beforehand.