Debt is something that almost everyone must have done, either because they really don’t have any money or get into debt because of their lifestyle. It can be said that debt is the opposite of assets, where the more debt it will show the lower the level of a person’s wealth. Are you one of those people whose debts are greater than the total assets you have?
Basically, debt is not a bad thing. Debt is of two types: productive debt and consumer debt. Productive debt is debt that is used to finance activities that bring financial benefits directly, such as loans for business capital. Conversely, negative debt is debt that is used for consumptive activities, such as loans to go on vacation or shopping.
Even so, in debt, you should consider whether it will be easy for you to pay later or even very difficult. The following is information on 6 ways to pay off debt that accumulates, quickly and easily, which has been summarized:
6 ways to pay off debt that accumulates
Compile a list of debts
The first way to pay off debt is to compile a list of debts first because this will make it easier for you to determine the priority scale later. Write down all debts in the order in which they are most prioritized to be repaid. Including, the amount of interest rates.
Setting the Payment Priority Scale
The next way to pay off debt is to set a priority scale for payments. Of course, debt with a small amount first.
After that, pay off the debt with the highest interest rate. Then, choose a relatively low interest rate. For large debts, make installments with stable interest.
Don’t settle debts with debt
If you are actively paying off debt, you should not create new debt. Especially for those who like shopping using a credit card.
It is better to settle the debt that must be paid first. Do not apply the pattern or lifestyle of digging holes and closing holes to settle debts.
Assessing Assets Owned
If it turns out that the debt you have already exceeds the 30 percent ratio, then you can try to review the assets you have. Because inevitably the debt must still be paid off, you can try to sell some assets that might be used to help pay off the debt.
Consider selling a vehicle, namely a motorbike or car, which may be a large amount of money, and pay off your debt immediately.
Think Again to Get Back in Debt
Basically, it all comes back to you personally. Before taking on debt, ask yourself “Do I really need the item, so I have to go into debt?”
If you are ready with the consequences of paying your debt bill later and not more than a 30 percent ratio, then there is no problem if you want to go into debt.
Disciplined Intentions and Attitudes to Pay Off Debt Immediately
Also make sure your intention and discipline in terms of how to pay off debt, is very maximum. That way, what is done to pay off debt will run smoothly because it is intended to be completely free from debt.
Manage spending well, prioritize savings and frugality and, don’t exceed the 30 percent ratio if you want to get back into debt. Get other interesting articles about finance here.
4 Characteristics to Quit the Habit of Debt
Have a Purpose
Getting out of debt doesn’t happen by accident, because it takes a combination of purpose and a strong will to do it.
To stop the habit of debt you must have a very strong will.
If you want to be free from debt, then start setting goals correctly related to the debt you have.
Breaking the Habit of Debt by Controlling Yourself
Marketing carried out by many manufacturers makes you more interested in buying new things, starting from buying clothes, cellphones, and so on.
If you can’t control yourself, spending patterns will become excessive and this will affect your monthly financial budget.
Patience is able to stop the habit of debt
Patience allows you to hold back when you buy things you don’t need.
Without a patient attitude, it will be easier for you to spend money on desires that can be postponed.
Instead of buying goods by way of debt, it is better to get used to investing.
Freed from debt due to unwavering dedication and consistency.
To stop the habit of debt, you must be able to refrain from debt for things that are not needed.
Prefers to buy things that are needed rather than what they want, and are aware of their abilities.
The journey to be free from debt is a long process and must be done consistently.
Without consistency, it will be difficult for you to be free from debt.
Find Ways to Add Money to Pay Off Debt
If you are currently mired in accumulated debt, then prioritize spending to immediately pay off the debt you have.
There are lots of ways you can do to add money every month.
For example, you unsubscribe from cable TV that you rarely use, prefer to exercise at home rather than at the gym, or you can also sell various items that are no longer needed.
The more fees that can be removed, the greater the amount of money you can use to pay off your current debt.
The more money you set aside to pay off debt, the faster you will be free from debt bondage.
When you are free from debt bondage, then it’s time to improve spending patterns for a better future.
You can set aside some of your income to invest in various investment instruments.