Five Ways To Get Rid Of Your Debt
It is very easy to get into debt. All you have to do is just spend money. Whether or not getting into debt was something you could have avoided, once you’re there it can be hard to get out. The effects of debt can be psychological and social. People can get very depressed because of getting into debt. Furthermore, debt has been known to damage relationships so much so that they break down. Listed below are some steps for you to take to make sure you attack your debt head on, and break the cycle.
Minimise Your Spending
Quite a lot of over expenditure comes down to buying certain products due to laziness. Rather than getting that expensive takeaway why not make a cheap pasts meal? You need to analyse what your income is and what your outgoings are. Treat it like a 3-line credit report as you would do for the tax office, if you were self-employed. A great way to do this is to set up an Excel spreadsheet and note down the figures. This way, you can work out how much disposable income you have left each month, after all your responsibilities. Once you get that number, you should deduct any unnecessary expenditure until you arrive at a figure that can provide your essential living.
Increase Your Repayment
This option may not be available to everyone. But, increasing your rate of repayment on your loan could be an important step in reducing your debt. Without realising it you may be making enough money per month to put more aside for your debt repayments. In this situation some people end up paying over double their original cost after interest. The more efficient way to approach your debt would be to contact your bank and ask to increase your payment. This will benefit you in the long run.
Prioritise Your Debts
Managing debt is hard, but when you focus in on one particular loan it can make a lot of difference. You can simply increase the minimum repayment on all your loans to increase your payback. However, this has a minimal effect in the long-term. The best idea is to drastically increase the repayment on a particular loan so you feel the benefit. This way you will visibly see the improvement, and after that you should do the same with your other debts.
Sell Your House And Rent Back
This proposition probably doesn’t sound attractive at present, but after a conversation with the Guardian Debt Management Limited, you may change your mind. There are many different reasons for wanting to go through this process, and it isn’t as daunting as you might believe. You may be going through a divorce and you need to reduce your payments, or a redundancy has left a cash flow problem. Whatever your reasons, selling back your house will give you the money to cover your debts. Then you can rent it back for a fair and competitive price.