Tips for Getting Out of Debt

by Mrs Money

Almost everyone has debt. Whether it’s from credit cards, student loans, mortgage, or other types of loans, people have debt. Many people are looking to pay off their debts. This can be a really difficult thing, but a lot of people know what simply paying the minimum amount means they will end up paying way more in the long run.

What can you do to get yourself out of debt? The first thing you have to realize is that everyone is in a different situation. This means that there is no universal, step by step instruction booklet out there.  Everyone is different. However, some of the key ideas are the same. If you want to get out of debt, you should:

Make a Budget

Making a budget lets you know how much you spend every month. It helps you figure out how much you can save every month too. When you know how much you can save, you have a better chance of building up your savings account, which will help you pay off your debt.

Get More Money

Getting more money is not always possible, but if you’re not already working a second job, you could try and get one. If you have collectibles that you could sell, you could get more money that way. You can also get more money by cutting out what you don’t use. Do you have a gym membership that you never use? Cancel it, and start putting that money towards paying off your debts. You can get more money by getting a second or third job, selling stuff you don’t use anymore, and by not paying for what you don’t use.

Figure Out a Plan of Attack

Part of getting out of debt is actually paying off your debt. For some people it is better to start a snowball. This means paying off the little debt first and working their way up to bigger debt. For some people it is better to pay off those high interest debts first. You might not know which is right for you, and that’s okay.

It’s okay because there are people that you can turn to for help. Remember how everyone is in a different situation, so there isn’t this magical, universal, step by step plan? You can talk to a professional in private wealth management Los Angeles to figure out your best plan of attack. They can help you figure out what you should be doing to get out of debt and build your wealth at the same time.

Talk to a Professional

In the end, you have to talk to a professional. You have to go in and talk to someone who has the financial know how and can give you the sound advice that you need. Getting out of debt isn’t going to happen overnight. Getting out of debt isn’t going to happen for you like it did for your neighbor. You need to go talk to someone who can give you advice that will work for you.

Everyone is different, so you shouldn’t ask for universal advice. Go to a wealth management bank where they work with different people every day. They’ll be able to help you make a plan to get out of debt. They’ll help you make a plan that fits your needs and your abilities.


When is the Right Time to Borrow Money?

by Kaylie Phelps

The decision to borrow money, either through a loan or by using a credit card, is a decision that many people make without really thinking about it. While in an ideal world we’d never need to borrow, the reality is that most of us can and will be in debt at some point in our lives. But is there a right time to borrow money? And if so, when?

Do You Really Need the Money?

The first thing to look at is your need to take out a loan or make a purchase on credit. Is it an essential purchase that must be made immediately, such as major repairs to your home, or is it a luxury item which you could afford if you just saved up for a few months?

It’s also worth looking at alternative ways of getting what you need. Maybe instead of going for that brand new 4K TV you could pick up a decent HD one second hand from Gumtree. Being smart with your purchasing decisions means you can often avoid unnecessary debt.

The Right Time to Borrow

There are, of course, some times when taking out a loan is absolutely the right thing to do. For example, if you have an existing credit card debt which has an interest rate of 19% and you can get a loan for the same amount with an 8% interest rate, the smart thing to do is to take out the loan and pay off the higher interest debt with the money.

There are various other smart times to borrow money. For example, if you were offered a new job with a far higher salary but the only way to get there was by car, the smart choice would be to borrow the money to buy the car and take the new job. The additional income would more than cover the cost of the loan, and you’d be working towards a profit in the long run.

Can You Afford To Borrow

If you’re seriously considering taking out a loan, you need to know exactly how much you’re earning and paying out every month from your account. Draw up a list of every expense, including everything from housing costs and insurance to food and fuel costs. That way you’ll know how much you have left each month.

The next is to figure out how much you’d be paying out every month if you borrowed the amount of money you need. Many banks have useful calculators for repaying loans that show how much you’d be paying back over different periods of time, which is ideal for planning your budget for the future.

Be Realistic About Things

When you’re weighing up the decision, be realistic about your circumstances and how much you’re really willing to part with each month. It involve giving up some luxuries, at least in the short term, while you work to repay the loan. Make sure you’d be happy scaling back on things like nights out or trips away, as some of your ‘fun money’ goes towards repaying your debts.

The decision to borrow money is very much a personal one, but just make sure you take everything into consideration when you’re making your decision.

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