Poor debt management can destroy your financial dreams and your personal life. Many people want to get out of debt, but do not dare to take concrete steps. In fact, paying off debt faster than the long due date is not impossible. In essence, you need dedication to be able to pay off debts and loans faster.
Basically debt is not something bad. Debt is a promise that must be paid, almost everyone has been in debt. Of course, every debt must be repaid, as high and as much as the debt. Therefore, you need to have the right strategy so as not to cause problems in the future. Because delaying debt payments will only make the debt pile up.
How to deal with debt without problems? Come on, see the full review below!
Type of Debt
Before discussing further about how to deal with debt without problems, you should first know the type of debt. There are two types of debt, namely:
Productive debt
It is a debt activity for financial purposes that will bring benefits in the future. For example, in debt to buy a house or business capital.
Consumer debt
This type of debt is the opposite of productive debt. Where someone is in debt to meet needs that are only consumptive in nature, for example buying a new cell phone, or to go on vacation.
Here are 4 smart ways and tips to pay off debt faster while saving you money.
Tips to pay off debt faster
- Pay Anytime
The easiest way to pay off debt early is to pay whenever you can. The amount you pay is not a problem because no matter how small the value you pay, it still lightens your burden.
- Make Overpayments
Make more payments on a monthly or yearly basis. If in one month you need to pay $ 1.2 million, then pay an additional $ 1.2 million for one year. Divide your monthly payments by 12 and add that amount to each monthly payment. For example,$ 1.2 million divided by 12 = $ 100,000. This means that you need to add $ 100,000 in each of your payments. Then your monthly payment will be $ 1.3 million.
- Cut Expenditures
Pay close attention to where your money is going and separate needs from wants to shop. Start saving by not stopping by your favorite coffee shop or lunch spot.
If you’re having trouble figuring out which expenses you can cut, start by setting a budget. You can take advantage of the available financial management applications. The application will help record and prioritize your spending.
- Earn Extra Money
When you want to pay off debt quickly, don’t focus too much on saving. Sometimes, the quickest solution is to earn more revenue.
You can read a complete article about finance or financial consolidation here
