Anyone who is in debt and lives on the tight budget can believe that there is no solution for debts other than to continue to owe. Well, know that you can get out of debt with little money.
And if you do not pay the debts, the inclusion of the CPF in credit protection agencies and even collection lawsuit are some of the devastating consequences in your financial life.
To help you in this mission, Credit Advisor explains how you can get out of debt by earning little.
Make a financial diagnosis
Before renegotiating your debts, clarify how much you earn and how much you spend. If you are not in the habit of jotting down and controlling your spending, a simple way to identify where your money goes is through the bank statement.
To make a financial diagnosis, that is, to understand if you spend more than you earn and what your main expenses are, print the bank statement for the last three months.
Find the main expenses and add the values according to the category, for example, “market”, “health” and “leisure”. Once this is done, it is easier to identify expenses that can be reduced.
How much can you save per month?
The task of paying off debts is not easy and requires discipline. To get out of debt by earning little, there is only one way out: save money. That’s why financial diagnosis helps you identify which expenses you can reduce or even cut to be able to pay back late bills.
Do you usually go to the mall and not leave without a shopping? It’s time to change that habit, at least for a while. Are you a fan of an expensive brand? Choose the cheapest one until you can consume again without suffocation. Identify a value that will have to be directed exclusively to the payment of debts.
Seek to increase your income
There are several ways to earn extra money. “Explore” some of your ability to increase your income. You can take advantage of a few hours of rest and direct what you earn towards paying off debts at least for now.
Then the money you get over can have another destination, such as a trip or retirement home. Do you speak English? How about giving classes on the internet? To increase your chances of success, spread it to your friends.
You can also become a MEI – Individual Microentrepreneur .
Find out where your debts are
Now that you know how much you can save on a monthly basis, clarify where your debts are. This process will take a little of your time, but you need to know how much you owe. Thus, it is easier to decide which debts to prioritize trading.
Contact the lenders and ask for the value of your debt updated (initial amount plus interest and penalties) and the days overdue. Also ask the conditions for agreement and the discounts in case of cash payment. If your debt is with the bank, it is best to visit your bank branch and talk to the manager.
Prioritize the payment of the highest debts
At the time of renegotiating your debts, prioritize the payment of the highest debts. Not always the highest debt is the higher value, but the one with the highest interest, such as a credit card or overdraft. Therefore, it is important to clarify with the creditors the interest that has been collected.
You can get out of debt by paying a little: choose a small installment that does not weigh in the monthly budget. If you can get more money over the deal, you can go ahead and pay off the installments. In addition, of course, to be a good option to get rid of debt faster.
Exchange your debt for a cheaper one
Did you know that there is a possibility to exchange the debt from one bank to another, to pay less interest? The portability of credit is a consumer right, regulated in 2006 by the National Monetary Council of the Central Bank (BC).
There is also the possibility of applying for a personal loan to pay off your debts, that is, you concentrate all accounts in only one.
At Credit Advisor, when applying for your personal loan online, you have chances of receiving various proposals and choosing the personal loan with an installment that does not harm your financial health.
Create good eating habits
Have you stopped thinking about how much you spend each month eating out? The moment you focus on paying down your debts even while earning little, you need to rethink your spending habits.
How about then, preparing your own kettle at home, with healthy choices and practical recipes? This example shows that in addition to saving money, new choices can help improve your quality of life.
In a short time, you will feel the difference in your pocket and pay your debts more peacefully. Reflection is the first step to changing your drinking habits.
Control your expenses
Controlling spending on a spreadsheet or even in a notebook is essential for anyone who wants to get out of debt by earning little.
Make it a habit to write down your expenses, to keep track of your situation and not lose control of your money. Do not forget to include small expenses such as the famous “coffee”. No matter how “harmless” they seem, they may weigh in your monthly budget.
Bom Pra Crédito has a perfect spreadsheet for those who like convenience and do not have time to do the math.
Download our expense spreadsheet for free and start tracking your expenses today:
»I want to download the free spreadsheet to control my expenses
Reserve money for emergencies
In addition to paying your debts, you need to prepare for emergencies that may arise. So, try to reserve money for unpredictable times. But do not forget to always prioritize the repayment of your debts.
To start with, create a goal of saving a small amount monthly and gradually increasing. When you reserve money for emergencies, you are wary to avoid a potential financial loss in the future.
And if you need money and you do not have it, run away from credit card interest and overdraft: opt for a cheaper personal loan.