Debts can be a serious problem.
In fact, over the years people have been invited to borrow money based on a pervasive marketing that has ledto buy much more than they could afford.
A little debt is not that bad, but when it’s too much, it can destroy a life.
Here’s how to get out of debt with realistic methods and with a good chance of success.
The first step, the most important one to get out of debt, is to save money.
To begin the process that will eventually bring to free yourself from debt is to learn to spend less than you earn.
If you earn 1,000$ a month, you can’t think of spending 1,500. Probably if you earn 1,000$ per month, you will have to spend up to 800, saving 200 to deal with any contingencies. And if then there are debts in progress, you need to save money to pay for them.
But what does it mean to save money? You do not have to live in poverty, simply you need to evaluate every expense in relation to two basic factors: its practical utility and your financial resources. Unfortunately, many are driven by the incessant marketing to compulsive purchases and often unnecessary.
How many things are purchased and then abandoned without being used, except for a few days?
How many times you spend 10 times the value of an item, just for for the brand?
Learning to live sparingly does not mean living in hell, it means to live well within your possibilities.
Because the debts, after all, they are a bad thing, just when you don’t have the money to pay them!
In general, no one should never borrow too much: the sum of the installments in progress, including your mortgage, should not exceed a third of all the disposable incomes.
But what happens when you ignore this rule? Well, in this case it is evident that you are no longer able to pay your debts, and you end up in a painful cycle that includes debt collection.
So, what are some systems to get rid of debts?
For those who are just desperate, there are specialized agencies that help those who have debts too high to be paid. These agencies contact the financial creditors offering a deal: the commitment to pay in exchange for a cut of debt.
This way, the creditors are able to recover at least part of the money lent and the borrower will have a bit of oxygen.
In the case of people with many different debts, it may happen there are different levels of pending installments to pay. This can lead to excessive costs (for example, more fees than the installment value), but also some other inconveniences.
In this case, you can take a debt consolidation, which means getting another loan with which to pay off all the others.
It often happens that the interest rate you can get is lower than that the previous debt, paid altogether. It is also possible that you can lengthen the overall maturity, thus reducing the value of the individual installments.