Debt or excessive indebtedness is a big problem in modern society. A person who continues to borrow money will unfortunately understand one day that he is already working to pay for the consumption goods he has. At this point, one is the slave of his property and has no control over his life and career choices; He’s pushing his credit life and can’t stop working for a week. This is the salary of a salary salary life.
In addition to the individual indebtedness, the family debt is not the purchase of goods by consumers, but by increasing the payments, the balance on the card or by increasing the credit limit or by adding credit. The consumer tries to make a payment to the budget without questioning the total cost and the long term results of the purchase. A payment accumulation forces an individual to make a continuous money entry even without a chance to skip a payment week.
In addition to mortgage and vehicle, there are several good reasons to borrow for consumption. Multiple credit cards constitute a large part of this problem. They often go through a tool that facilitates transactions to an unthinkable financing tool, when an interest rate of 20% or more is mistaken! Here are some tips to gain financial independence and avoid unnecessary borrowing:
SEND SINGLE CREDIT CARD AS A OPERATION TOOL
To get started, you only need one credit card to meet all your needs. Eliminating other credit cards saves you from debt, because your card reaches the limit faster and reduces the balance before you use it. This way, you’ll have better control over your expenses, making it a good place to get better interest rates.
If you think that a single credit card will not be enough to create a good credit, think again, you can only get a great credit score with a $ 500.00 limit card you pay regularly. Therefore, it is useless to duplicate them and increase the risks of indebtedness.
MAKE A CASH FLOW BUDGET IN ALL BORDROLS
When you receive your salary or other cash payments, plan your fixed and irrevocable payments with this amount until you receive your next salary (rent, mortgage, vehicle, energy, etc.). Pulling your regular payments from your latest salary, food, hobby, new clothes, etc. You can immediately find out how much money you have for more variable purchases. This very short-term vision is a way of easily finding oneself in everyday life and avoiding getting into credit.
If you have a monthly mortgage and a biweekly payment, it is strongly recommended that you synchronize both to cut your biggest payment for each payment immediately. You can easily change your two monthly mortgage payments for half of every two weeks. Two advantages arise from this approach; First, you don’t have to think about saving your money for the mortgage payment at the end of the month, because you will pay your mortgage directly on every salary day, and the second you pay one year later. your mortgage. You can do this exercise by week.
By knowing exactly how much money you have for your variable expenses, you will be amazed at how easy it is to stay disciplined and spend less until the next cash entry. we won. The aim is not to bury the credit card forever, but to pay the full balance before the end of the month and to avoid any permanent deferment of your balance. This small budget exercise is very simple, so don’t hesitate to use spreadsheets.
SAVE CREDIT PROMOTIONS OR BEFORE USE
The idea of entering your budget with your monthly or revolving credit or with the option to pay your money can be very dangerous. In fact, a person can accumulate these purchases with credit and continue for months, see years. And if you intend to win by minimizing payments, the interest rate increases the length of your loan’s redemption period and you’re at risk of doubling the good. In short, buying a product with a credit card due to lack of resources is often a sign that you cannot pay and that the debt is the beginning.
Instead of financing with interest rates, it would be ideal to save money before buying. But this is not always possible, and fortunately there is a way around this rule. You can use 0% to save all these promotional promotions and make this promotion period to pay them all at the end to be able to enjoy the goods in question while you are frugal. In a 0% rate environment, you really have more savings to buy instead of getting credit. Another technique is to buy credit and transfer the balance to low interest promotional credit cards. The interest rate was not eliminated but was very reasonable. These are two methods that work, but it is very important. and do not abuse, so you will not find yourself indebted.
Forward the debt, follow these three points and pay the balances with the first high interest rate, and possibly consolidate the remainder of a lower interest rate. The lower the debt, the easier your monthly payments and the better your credit. Better financial health and good credit attracts low interest rates, which are important when negotiating for your mortgage. Excessive indebtedness turns into a vicious circle, but cancels this advantage.
Taking control of your personal finance means taking your life under control. When you save yourself from the necessity of consistently producing money, you will have a better career choice and you will be happier. You’ll be amazed how these three tips will help you control your funding and give you the freedom to make thoughtful choices in your life.