When you are in debt, things changes a lot and the most impact will be on you. This impact is not limited to finance , but also personal and mental impact. So, it is necessary to plan your debt wisely so that it’s not impacting your peace. In this post, we will talk about how you can reduce your expenses and consolidate your debt wisely.
Following are some ways to manage this-
#1 Keep your wish on hold for now
See, there are usually two types of expenses-
Necessity – food, stay, education, transport, etc. comes under necessary expenses which can not be avoided. Although you can do a lot to minimize the expense in these areas as well. For example, instead of hiring Uber or other taxi, you can use public transport and can save a lot. But still, for the time being, I am keeping this in necessity section.
Wish – This category has everything apart from necessity. Like you wanted to buy a car or go on a vacation. Although these are required in life , and you definitely want to get this , but these are not necessity. Such plans can be avoided for the time being and, when you are out of debt, can be fulfilled. This way you can save some bucks which can help you repay your debt.
Consolidate your debt
Let’s say you are with multiple debts like – personal loan, home loan, education load, credit card EMIs and more. Now each of these will have their own EMI, which is very hard to maintain. You might be missing EMIs which have been hurting hard on your credit score. Also, the interest rate in such unsecured loans are very high.
So, instead of paying these loans separately, you can consolidate your debt as well. Debt consolidation is nothing but accumulating all your loans in one and instead of paying separate EMIs, you will be paying one. You can learn more about it here.
Start looking to increase your income
If you are a salaried person, think about how you can increase your salary. This may include, asking your employer for the hike or think of switching the job or may be learning some trending stuff in your industry to land a demanding job. You can also think of doing some part-time job for the time being, you are in debt. If you think you don’t have a skill to start something apart from salary, learning a new skill is not difficult. There are plenty of resources on YouTube for free which can land you some extra bucks.
If you are a businessman, you can think how you can increase your sales and eventually profit. Think, how you can expand your business may be in other locality or can have some corporate tie-ups. This way you can have your income increased.
These were some quick tips to reduce your expense and consolidate debt. We talked about how reducing expenses can help you get out of debt in a good way. Also, debt consolidation can be a way to get things on track.