At some point, "debt" will inevitably have a negative effect on you, no matter how small or large. Too bad it will affect your financial health as well as your mental health. To avoid as well as solving this problems It's time to plan on!
How to solve? Which one come first? Let's settle down the debt accordingly.
Solving Debt in 3 simple Steps
Step 1: Brainstorming
Use a pen, a book or a computer to record all the debts in a table. The amount of each debt, the regular repayments and the interest to be paid monthly on each debt.
Step 2: Choosing your method
Focus on debt repayment in the following order
Method 1. Release the debt with the smallest amount first this is called "Snowball Method"
Method 2. Debt settlement with the highest interest rate first "Avalanche Method"
The Avalanche Method is for those who want to get rid of debt with the highest interest rate. Snowball Method is for those who want to get rid of small debts first, because it helps you to stay motivated. When you see a small amount of debt.
Step 3: Execute the plan
Every month, after deducting the necessary expenses, you will know that you are able to repay any debt first. Summarizing your monthly income and expenses also helps you realize the possibility that you can still borrow more if necessary.
For example, if you have $ 100 left over after paying the necessary expenses, do you want to take the remaining balance this month? Which debt to pay first?
To manage your debt well, you should have a debt consolidation chart or debit book that can be tracked monthly and calculated. With the amount that will pay off this debt, how many months and years do you need to settle it? Also, even if you have a debt settlement plan, you should regularly check your income and expenses to be able to Adjust to suit your own changing financial situation.
