If you are wondering how to get out of debt fast, here are some simple yet powerful ways that can actually help you in doing that successfully.
In today’s growing global economy, people can get access to credit without analyzing their capacity to payback the credit.
Do you get sleepless nights worrying about your mounting debt level?
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Is your doctor worried about rising stress levels?
Are you worried about future of your family because of lack of financial security?
If yes, let’s find about different ways of how to get out of debt as soon as possible.
What Will You Learn?
- How to develop the habit of saving more?
- What are the various ways of reducing your expenses?
If you are an organisation, having high debt levels is a warning signal which if ignored can lead your organisation to bankruptcy.
If you are a student who has already taken education loan, rising credit card debt if not controlled can affect your career.
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If you are a person who believes in spending every penny earned and not saving, there are high probabilities of you facing tough time in the future.
How To Get Out Of Debt #10 Powerful Steps
#1) Identify the Reason of Your Rising Debt Level
As mentioned in the book ‘Rich Dad, Poor Dad’ by Robert Kiyosaki and Sharon Lechter, Debt can be either good or bad.
Good debt is the one that will earn money and pay back the debt for you while bad debt has to be paid back by the borrower. Buying a home is a bad debt because you have to pay the money.
Having a high credit card debt is as compared to others is very common. This can be controlled at the first place by making only necessary expenses.
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If you took debt for a start-up whose possibilities of achieving break-even in near future are less, then look for partners who can invest in your business in order to get rid of the debt.
If your start-up has failed, then sell off your assets as soon as possible in order to get rid of the debt.
It’s always better to take debt from an organization which doesn’t charge prepayment fine.
#2) Build Your Budget
Keep track of your spending, get organized, file important papers and look for better deals in order to stay financially healthy. This will help you simplify your life.
Make a list of your debt owed and enter the amount owed, minimum monthly payment and the time left to pay-off the debt.
Rank them on the basis of time left to pay-off the debt with rank 1 given to the lowest number of months left. Pay this debt first to reduce the numbers of debts in your list.
#3) Invest Carefully
Investing in mutual funds and stocks will help you earn better return.
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Constantly monitor your investment portfolio in order to avoid losses and increase your debt.
Calculate Return on Investment before making an investment. Go through the credit rating agencies report about the company before investing in its stocks.
#4) Reduce Your Expenses
If interest cost is the main reason behind your rising debt level, refinance your debt at a lower rate. Look for schemes offering lower interest rates and get rid of your debt as soon as possible.
Many banks offer mortgages with interest only payments for the first few years. This will help you leverage your investments.
It’s always advisable to sell-off the assets (or inventories) which are not getting used (or sold), remove employees who are sitting idle and sell investments which are not earning returns in order to get out of your debt.
While going for shopping, make a list of necessary items to be purchased. Don’t get carried away and buy unnecessary stuff that is not required.
If your organization has the capacity to increase production levels, then increase it and export the products to countries where profit margin is high. This requires market research but the profit earned will be worth the effort.
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If you’re an employee working for 8-10 hours, look for options of giving tuition’s to neighboring children.
If it’s possible, you can even rent a room in your house and use the extra income to get out of debt as fast as possible.
Start your own small business at home which requires very less investment like tiffin services, driving classes or sports coaching.
#6) Negotiate the Terms With Debtor
If you are looking for ways to get out of debt renegotiating the terms of credit, with your debtor including the amount of EMI, number of payments and time span in which the loan has to be repaid is a good option.
Instead of allowing him to go for legal process of repossessing the goods for which loan was taken, try to negotiate.
#7) Save More to Get Out of Debt
Saving will help you prepare for the future adversities that may arise without notice.
You have to be prepared if your child wants to go to Howard for future studies; if your wife wants to go to LA for a holiday or if your doctor diagnoses you or your family member with a serious medical issue.
CEO of an organization has to shield the organization with chances of new competitor entering the market with resultant loss of market share.
I would also recommend reading of the article “10 Money-Saving Habits of People Who Didn’t Take Loans for Their Kids’ College”.
#8) Develop a Future Plan
It’s never late to change your mind about being wealthy and looking for ways to achieve financial freedom. Act fast and stop making excuses of lack of time.
#9) Surround Yourself With Like-Minded Positive People
People in your community may unintentionally help you find a business idea or may offer you a job or some help to reduce debt.
Reading books on topics ‘The ABC’s of getting out of debt’ by Garett Sutton will motivate and help you identify the problem along with its relevant solution.
Reduce your stress levels by going for morning walks, taking deep breath and doing exercise regularly. Listen to your favorite music regularly.
#10) Credit Counseling Through Counseling Agencies
Guidance of these agencies about appropriate debt level and schedule of its repayment can also prove to be beneficial.
They’ll help you get out of the debt as fast as possible. Bank of India offers credit counseling service Abhay for helping people get out of debt.
To Conclude
Some amount of debt is considered necessary in order to grow and achieve success.
An organization can’t innovate and produce new products unless it has the capital available to invest in R&D.
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Money management should be a part of lifestyle. You don’t have to get obsessed to it.
It’s not the number of millions in your account that matters; it’s about how you manage a penny in your pocket.
Consider money world as a game with you as the only player (don’t bother about others) and the fate of the game will decide your way of living (rich or poor).
