How to get out of debt quickly? 10 tips to put into practice!

According to the National Confederation of Commerce of Goods, Services and Tourism (CNC), in July 2021, the total number of indebted consumers was 71.4%, and these people are looking for ways to get out of debt quickly.

Summary with a preview of what you will see in this content:

Know the exact amount of debts;
To get out of debt quickly, organize your personal finances;
Negotiate and pay off debts with higher interest rates first;
To get out of debt quickly, develop a financial plan;
Set goals;
Cut unnecessary expenses;
To get out of debt quickly, look for an extra source of income;
Always pay in cash;
Save part of your earnings;
To get out of debt quickly, consume consciously.

1 – Know the exact value of your debts

For customers who have a lot of debt, it's difficult to know the exact amount of each debt.

But to get rid of it once and for all, you need to understand the exact value!

So how do you know the value?

Well, you should visit the Serasa website and log in or register using “create an account” in the upper right corner.

If you are registering, please note that it is important to provide your CPF, date of birth, email address and full name.

Soon after, you'll have access to your credit score, including information on whether you're in debt, which companies you owe, and how much you owe.

For those who prefer, you can also check your score and debts through the SPC, Boa Vista and Quod websites, something we have clarified. in this content.

2 – To get out of debt quickly, organize your personal finances

To make a budget, you need to make a list including all your fixed costs, such as basic utility bills for electricity, water, telephone, and rent, for example.

Next, calculate the average amount of monthly expenses that represents your cost of living.

It is essential that you have this value clearly in mind, as part of your income is compromised.

Therefore, the remaining amount is available for investment in variable costs, in addition to other investments or to create a financial reserve.

3 – Negotiate and pay off debts with higher interest rates first

When deciding which debt to pay off first, it's a good idea to prioritize the one with the highest interest rate, such as bank debts.

Debts with financial institutions can even cause interruption of service or loss of an asset (such as default on a secured loan).

In this sense, define the debt that will be paid initially and make a proposal to the creditor.

Don't wait for the company to contact you and inform you about the debt; show interest in paying it off!

Also, please be aware that this is a two-way street, meaning you must inform us which payment option is most viable for you, including the maximum number of installments and the amount.

If you intend to get out of debt quickly When making a cash payment, check whether it is possible to reduce interest rates or obtain special conditions.

Note that the creditor has as much interest as you in paying off the debt, so you can propose solutions that fit your budget.

And in addition to contacting the company you owe money to, look for offers from other banks.

But how can I do this?

In some cases, it is worth applying for a loan from a bank to pay off debts at other institutions.

This way, you exchange several high-interest debts for just one loan with adequate rates.

This is a very cool alternative for those who have no chance of negotiating with the original creditor.

However, be very careful!

There is no point in accepting a payment proposal that you cannot fulfill.

Don't feel pressured to sign a contract immediately; clarify all your doubts and make sure it's worth it.

4 – To get out of debt quickly, develop a financial plan

On the other hand, you should plan your personal finances, as this allows you to manage your money to be more productive.

So, keep in mind that when you plan your financial life, you take emotion out of the equation and limit the possibility of mistakes.

As a result, no money problem will be too big for you because you'll know how to solve it.

5 – Set goals

Goals are essential for you to achieve what you want, from your personal to your professional life.

They must be defined because they indicate the path you must take to achieve them.

At this point, you should not act emotionally, but rather follow a process that is based on rational actions.

So, a tip for get out of debt quickly, would be the use of the SMART method.

This is a method used to define achievable targets that actually bring results.

Therefore, it is important to ensure that your goals are:

Measurable – it is not possible to achieve a certain goal without it being closely monitored, so make sure that it is possible to measure progress;
Specific – instead of considering vague ideas, always have clear goals in mind;
Achievable – you must also be realistic to understand whether you are able to achieve your goals;
Time-bound – by setting a deadline to complete your goal, you avoid leaving complicated tasks for later;
Relevant – why do you want to achieve a certain goal, and will it have a positive impact on your life?

After answering all the questions above, create an action plan that includes all the steps to implement your ideas.

6 – Cut unnecessary expenses

One tip to avoid buying unnecessary things would be to write down your daily expenses.

Although it's a tiring task, when you record your expenses on paper or on a computer, you also start to reflect on each one.

This way, it is possible to consider whether the items are actually worth the amount paid.

Unfortunately, it's common to buy items on impulse, but this should be eliminated from your financial life.

The main goal here is for you to see the possibility of exchanging small expenses for a bigger achievement like a trip.

However, you will need some time to identify which expenses are superfluous.

For example, when you pick up your child from school and take him out for ice cream, this is not an unnecessary expense.

You don't take your child for a walk every day, but this is an act that can bring you closer together.

The scenery changes when you intend to get out of debt quickly, but leaves a television on in the living room while the whole family is gathered in the bedroom.

Therefore, identify unnecessary expenses, avoiding small expenses that become big villains at the end of the month.

One tip is that you always think about the following:

Waste is money that goes down the drain, not bringing any quality of life to you and your family.

7 – To get out of debt quickly, look for an extra source of income

When we're talking about financial life, it's common for unexpected events to come to mind.

In this sense, what action is necessary to solve the problem?

In addition to saving money, you can earn additional money to meet your needs.

And besides the extra income giving you a chance to prevent financial instability, know that it's possible to always have a positive profit to invest in large projects.

As additional income options, you can work with reselling imported products, affiliation, programming, digital marketing consulting, writing, or testing apps and websites.

Some also invest in online stores, third-party income tax returns, private language classes, social media profile management, illustration, graphic design, and more.

Note that there are several options and you just need to research and dedicate yourself to get good results.

8 – Always pay in cash

To get out of debt quickly You must be very careful with your installment purchases.

You've probably gone to the mall with your credit card and bought products in installments and thought, "Ah, this installment is small, I can pay it."

But, if a product is paid in 10 installments worth R$$100, during the period, the value will be compromised from your salary, so is it worth it?

And we haven't even considered the interest included in installments!

It's common to see people getting involved in installment debts that snowball into a huge problem.

Therefore, it is a good idea to consider purchasing outright.

If the example above is considered again, but now with payment in cash, we are talking about a product that costs R$ $1000.

Is it really worth the investment now or do you have something more urgent to buy?

When you pay in cash, you think twice about your expenses and have more control over your finances.

Another advantage of this type of payment is that the seller can accept a negotiation, such as offering a discount, since there is no card percentage for the store to pay.

9 – Save part of your earnings

There are two main reasons why you should save money each month:

Financial independence, in addition to a better quality of life.

First, you need to set aside a certain amount from your monthly budget and invest it.

In addition to multiplying the amount, you prevent the money from losing purchasing power due to inflation, which would be the persistent and widespread increase in prices.

Quality of life improves when you face difficulties and can count on your reserves to help you.

However, so that I can get out of debt quickly, how much should I save each month?

It is generally recommended that you save at least 10% of your monthly net income.

However, we cannot determine an exact amount that you should save monthly because it depends on your reality and also your goals.

For example, there is the 50-30-20 budget model in which half of your salary goes towards your needs, 30% to spend on what you prefer and 20% for investing or paying off debts.

And a father who supports 3 children is able to save 20% of his salary?

The answer is probably no, so try to save, even if it's just 1% of your income, it will help you in the future!

10 – To get out of debt quickly, spend consciously

The first step to making an informed purchase in any situation is to make a list of all the items you need.

When you have a direction, you can facilitate and streamline the purchasing process, making it less likely that you'll fall into traps like buying more expensive products or unnecessary items just because they were on sale.

On the other hand, you should never buy on impulse.

We all know this is not an easy task because when we see something with a deep discount, the urge to buy is huge.

But this type of sentimental purchase is not good for your financial health.

There are several techniques to avoid self-sabotage, such as asking yourself the following:

Do I really need this?
Will I be using this product in a year?
Is the item useful for my life?
Can I pay for the purchase without any problems?

Don't feel pressured, answer these questions and buy if necessary.

Credit Market

Luciana Sampaio 17 de September de 2021