Many people are sick of spending much of their income for repaying loans. In this situation, we could simply wish that we made some more prudent financial decisions when we were younger. Fortunately, we are not alone and millions of people are still struggling to repay their loans. When people are forced to rely on credit, we would eventually accumulate a huge amount of debt. However, there’s hope if we are looking for it. We should look for ways to get out of debt and we need to take control of our financial future. There are steps that we can do. The first thing we need to do is to start from where we are now. This may sound very obvious, but in reality, many people are burying their heads and refuse to make necessary changes. In this case, we should confront our debt and be brave. We should make an accurate record of how much we owe and to whom. We should also add more details, such as repayment periods, monthly instalments and interest rates. We should know where we are exactly, when we are attempting to deal with debts.
After we do this, we should know where our position is financially. Other things that we need to consider are our total income and expenses. We should record any source of income and expenses. This is a basic financial task, but could give us significant information on the performance of our finances. There could be some luxuries that we need to eliminate, permanently or temporarily. By doing this, we should be able to get out of debt, much faster. We should also consider our magazine and newspaper subscriptions. These things are some of the basic expenses that we could eliminate at least temporarily. In many cases, we could stop subscribing magazines, if there are many websites that could provide us with similar updates on topics that we prefer. We need to make a list of services that we are being charged for and consider whether we really need them. It could be surprising how these small items could add up. Using this information, we should be able to create more sensible plans, such as focusing on paying the principal of loans with the highest interest rates.
Whatever we do, we need to be particularly disciplined. Unfortunately, people who are feeling the financial pinch could be tempted to apply more debts to maintain their current lifestyle. But often, their situation doesn’t improve and their income simply couldn’t cover for their lifestyle, especially because they don’t want reduce their expenses. This could happen if we are too comfortable with some of the luxuries and already consider them as essentials, although they are not. If we insist on keeping some of the expenses, we should ask ourselves whether we really need it. We should brainstorm ways of raising specific amount of money each month to cover our expenses without adding more debts. Often there are things that we don’t need, such as unwanted gifts, so we could sell them in garage sales and eBay.