Debt used to be a scary notion for almost all individuals. People immediately imagined foreclosures, extreme stress, and strain and sometimes even losing everything that they own. However, in recent times, debt has become a way of life. Everyone swaps their credit cards for everything and has almost everything that they own no a EMI mode. This might be convenient, however dangerous. If we talk about getting rich, one of the crucial acts in that journey is to get rid of debt. A must. A should. A definite requirement. No questions asked.
What is Debt?
Debt in simple terms is a certain amount of money that is borrowed by one individual(s) from another. Debt is time and again used by corporations, companies, and persons for making large purchases or investments which or else would not have been possible under normal circumstances. So this type of agreement gives the borrowing party authorization to make use of money under the situation that it is to be paid back at a later date, more often than not with interest.
The most common forms of debt include mortgages, auto loans, and credit card debts.
So how can you get rid of debt and just allow your money to breathe and grow? Here are a few steps:
- Sacrifices must be made: because you aren’t currently making a lot of money in your job and hence the mountain of debt, taking up a side job is an effective way of increasing income. This may include part time jobs in the weekends or even early morning or late at night. Hence some sacrifice must be made in order to start the process of slowly reducing the amount to be paid off.
- Making use of the skills you have: if you know how to fix up and tune an automobile engine, save the money by doing it yourself instead of spending an exorbitant amount at the mechanic’s. Hence, any skill can be put into use and money can be saved up in the process.
- Buying for less and selling for more: this is a self explanatory point. This can be down by buying products in bulk for a cheaper price, customizing them and selling them at a slightly higher price. And the best part is that it can be done with almost any product, ranging from ceramics to clothes to home linens.
- Selling: getting rid of the things that have been lying around the house for years and have no use to you is another great way to increase your income and make you one step closer to becoming debt-free. Selling unused crockery and other knick-knacks at auctions and garage sales as well as thrift stores fetch you great prices for your stuff.
- Budgeting: drawing up a detailed budget helps you plan and know exactly what amount to spend and where. This will also cut back on unnecessary spending, therefore saving you a lot more money.
- Notifications: all your banks, as well as creditors, must be notified as soon as possible. They may be able to help you by freezing interest or make an arrangement where it’s possible for you to pay in smaller amounts.
The above tips will slowly but surely increase your income, therefore, helping you to pay off your debt. It is always imperative to manage and account your finances carefully and let your money breathe every once in a while.