How to Eliminate Your Debt: Friends, in this article “How to eliminate your debt”, I will tell practical things for you. You read very carefully.
In today’s time, there are many different loans on the same person. Such as – Home loan EMI, Car loan, Credit card loan, Personal loan and many more. Which they pay every month as EMI. It is not that they do not try to repay the debt. Apart from this, many times it happens that they continue to pay their debts posthumously. Still does not pay. After that, their children are disturbed while completing their unfinished work. The problem here is that they are not able to eliminate your debt even after best efforts.
Useful ways to eliminate your debt
Friends, if you have to eliminate your debt then the following five things have to be kept in mind:
- Do not take any new loan
- Budgeting of income and expenditure
- Reducing your expenses
- Planning to eliminate your debts
- Repeat the process till the loan is repaid
Let us now know in detail.
1. Do not take any new loan:
The first way to eliminate your debt is not to take any new loan. These things are very common. But it is not common. It has often been seen that people keep taking loans on loan despite being already in debt. Apart from this, they also continue to shop fiercely with credit cards. Where the annual interest has to be paid even up to 40%. Which is too much.
Friends, the thinking is that as soon as your income increases or any debt is gone. They immediately take another loan.
So, you vow not to take any new loan even if the world goes from here to there. You will eat salt bread at home, wear old clothes, broken phone will run for few months. But, we will not take any new loan. If, you will not take a new loan after being fully dedicated. Only then you will be able to repay the loan.
2. Budgeting of income and expenditure:
Make a budget for your income and expenses. Also keep an account of 1-1 rupees spent. You have to make a list of every expense. It does not matter whether the expenditure is one rupee or thousand rupees. In other words, the cost is to be incurred. But you have to make a list. You have to budget your income expenditure. Now prepare the list of expenses.
School fees Rs 2000
Home loan emi Rs 11000
Similarly, write the entire expenditure from top to bottom. No one should miss any expenses.
Now subtract this total expenditure from all your income. Now see how much money you are saving. Don’t worry about how much was saved. That is what it is. Half of the money you want to save, separate the money and put it in a piggy bank or deposit it in the bank. You have to spend for a whole month with half the money left.
Keep in mind that the budget should be prepared one day before getting salary. Because if you did not make a budget, then there is more possibility of irregular expenses. In addition, according to the budget made on the salary day, take out half the money and set it aside. Because, even one day delay will hurt you. If you save some of them too. Because this savings will be better for you. Additionally, some of your saving today will benefit you throughout your life.
3. Reducing your expenses:
If you reduce small expenses then you will be able to save a lot of money. Such as – reducing mobile bills, saving electricity, sharing mav driving. Where there is no need. Using no-cost methods.
Perhaps, you must be thinking that I am advising you to be a miser. But, friends, without cutting your expenses, you will not be able to repay the debt. In other words, spend money only when it is not necessary.
4. Planning to eliminate your debts:
Because you have to end debt. So first make a list of those debts. Write the listing of these debts in descending order. for example:
Home loan Rs 10,00,000
Car loan Rs 3,00,000
Personal loan. Rs 2,00,000
Credit card loan Rs 1,50,000
Similarly, write other debts as well.
Now the thing to do is to withdraw the money that is in the piggy bank after your salary. Apart from this, withdraw money from the bank of the previous month also. Now combine the two and repay the loans with the lowest amount. In other words, in addition to EMI, keep paying. No matter how little this money is, you should not be shy. Keep paying as much money as you can. Because, the loan amount and interest will keep decreasing.
Repeat the process till the loan is repaid
If there is no option of part payment in your loan repayment rule, then deposit that money in the bank account. And similarly, keep depositing your savings in the bank every month. Thus, within a few months you will have the money to repay the smallest loan.
If you have finished a loan, you do not have to stop and you do not have to increase any debt. Your next step is to focus on repaying the loan for the second smallest amount. Now, as soon as the EMI was running on the loan you paid, put that money in the bank as soon as you get the salary. Also, let all the processes run like you did to repay the loan earlier.
After repaying each loan, you have to keep moving upwards based on your loan list. Keep in mind that in order to repay the loan, do not forget to repay the installments of other loans.
This habit of yours will help you live a good life even after repaying the loan.