Debt-free life awaits you!
No matter how small the amount is, managing your debts and bills is crucial if you want to achieve your financial goals. Not only do you need to repay all of your debts, you also have to manage your overall finance so you don’t use up all the money you have on debt repayment that you starve yourself and lose your house. So, how do you manage your debts and bills without losing your normal life?
First, list all of your debts and bills.
Make sure your list is detailed. To get you started, here are some of the things you can put on your debt list:
– Amount of debt
– Payment date
– Interest rate
List them down for all the debts you currently have. As for regular bills, write down how much and when you have to pay each week or month.
Second, pay your bills first and save some money.
Regular bills need to be paid on time and in full. This way, you avoid adding a bunch of unnecessary interests to pay in the following months. After paying your regular bills, send some money to your saving account. Wait, saving?
Yes, saving a portion of your income is much better that using it all up to repay your debts. Setting some money aside means you’re helping the future you overcome emergency situations. So, no matter how tempting it is, always remember to save constantly and never, ever touch your savings under normal circumstances.
Third, choose between the avalanche and snowball methods.
In general, there are two methods to manage your debts and paying them off. Here’s how each method works:
1. Avalanche method
This method helps you avoid spending too much money on high interest rates. To do this, you need to pay the minimum amount on all debts you have. Then pay extra money, as much as possible, on the debt that has the highest interest rate. Do this until the debt is paid off before moving on to the one with second highest interest rate.
2. Snowball method
This method encourages you with small achievements over a course of time. Start by paying the minimum amount on all debts, then deposit your extra money to the debt with lowest amount. After you successfully pay off one debt in one go or two, you’ll be more motivated to pay off the second lowest debt, and so on.
If you feel those two methods are not for you, there is another, simpler way to manage your debts. Calculate the total amount of your debts and apply for a short-term loans. After you get the money, use it to pay off all of your debts. By doing this, the only things you need to pay are the short-term loan and your regular bills – which means less hassle and there is also the possibility of lower interest rates.
Visit SpotMe to apply for an online short-term loan and achieve your debt-free life!