Financial expert advice that, if you
know that your debts are already getting out of hand the very first and
reasonable step that you will have to do is to basically reduce how you
spend money. This means cutting back on your usual luxuries and to give
more attention to your most important expenses such as your monthly
bills, food, rent, and the like. It is a good idea to list down your
usual expenses in a month and categorize them based on whether you can
or cannot live without them. By doing so, you will have more money to
pay off your existing debts and may be have some extra that can go into
your savings.
Subsequently, what you will have to do
is to restructure your existing debts. This is the part wherein you will
have to create a plan on how you can lower your interest rates and
which debt you will have to pay off first. You can create a list of all
your debts together with their interest rates. You can either try to
negotiate with your creditors to lower your interest rates or to waive
certain fees which you may have accumulated. You can also try to avail
of a loan which has a considerably lower interest rate and pay off all
your other debts with it. By doing so, you are also reducing the amount
of money you will be paying in a month. If you are considering to get a
new loan to pay off your other loans make sure that you have planned it
correctly and make sure that you have enough money to pay off the
monthly dues.
Final step is to try to take a look at
your assets; look for a way where you can cut down or reduce. Take for
instance if you have just bought an expensive appliance for your house
which is not exactly necessary, you can sell it and use the money to pay
off your loans. Or your house is becoming too costly, you may also
consider moving to a smaller and less expensive house. Basically,
anything which you can do very well without, you can try to sell it and
use the money to help you pay off all of your debts.
By: TIAMIYU ADIO ISMAIL
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