Tips for getting out of debt by the end of the year
A few simple attitudes can help you pay off your debts and still turn the year in blue with no worries. Check out!
According to data from Private credit checkers, more than 63 million Brazilians are negative – a number that represents more than 40% of the Brazilian adult population. At the end of the year, many people with outstanding debts are distressed that they will start a new year with outstanding accounts.
In addition, with lenders charging, it is not difficult to find people with debt depression, as the consequences of debt affect their pockets and health. But not everything is lost! The good news is that there is still time to turn the tables, get out of debt and start the year in blue. Check out our tips!
What to do to pay off debt faster?
Anyone in the red still has time to organize to settle the issues before the year is over. For this, the first step is to survey all overdue accounts. It is necessary to note everything, such as house expenses, credit card pending, bookings, use of overdraft etc. After gathering this information, enter the amount to be paid, along with the interest rates charged to calculate the total due.
With this information listed, note which debts have the highest interest rates – these are the ones you should prioritize on repayment. It is important to settle high-interest debts first because they are the ones that get you into more and more debt, turning an open debt into a real snowball.
If these accounts are already overdue, it is ideal to renegotiate the amount with the lender. This can be done by calling your bank, credit card service, etc. Keep in mind that you may be able to get a cash discount on debt or even if you need to pay the full amount.
Debts with credit cards are one of the most afflicting Brazilians. According to Goodline Bank data, the average credit card revolving interest rate reached 300.1% per annum in June 2019. To give you an idea, who pays at least the minimum credit card bill has interest rates reach 277.2% per annum, while those who do not pay even the minimum suffer 316.4% per annum. That’s a lot of money you give to the bank for nothing!
Another debt that abuses the interest rate is that acquired through the use of overdraft, a line of credit offered by many banks that allows the account holder to use an amount of money previously set by the financial institution if there is no money in the account. Overdraft is considered an “emergency” credit line, but according to Goodline Bank data, interest rates of this type reached 322.2% in June 2019.
Anyone who has ever had to pay the minimum on a credit card bill or has fallen on overdraft often believes this is a no return path. But there are ways, yes, to recover and get rid of this nightmare.
One clever way to get rid of a heavy debt is to swap it with one with lower interest rates. Many people are frightened to think of “swapping one debt for another”, but this is a very good alternative for those in debt. We here at Bcredi offer secured home loans with interest rates starting from 0.99% per month, quite different from the values on the credit card and overdraft.
This way, you stop throwing money away at high-interest rates and can restore your financial and emotional life to installments that fit your budget.
Tips to get out of debt and still save
Check out how simple everyday attitudes help you get out of debt and often make you over a buck at the end of the month!
Make a spreadsheet to track spending
Controlling your accounts very carefully is paramount not to get into debt again. This control can be done on paper or using a personal finance spreadsheet. How you do it is up to you, but keep in mind the need to jot down everything you spend, from a coffee and cheesecake in the bakery to buy a split TV, for example. It’s all a matter of habit! Over time, this process of recording what you spend becomes very natural.
In the same worksheet, write down how much money you receive each month. This amount is made up of your salary, a bonus the company paid you, the money you earned for your birthday, and so on. This way, you will get a clear understanding of where your money is going and also not get lost in the payments you have to make.
If more people live with you, it is very important that all family members get into this scheme. If each member helps control spending, it will be much easier and healthier to eradicate debt.
Always try to renegotiate a debt
Those already in debt can never forget the possibility of renegotiating a debt. It is often more interesting for a bank to receive part of what you owe than to receive nothing at all. Thus, renegotiations that are interesting to both parties are always a good alternative. Don’t be shy about doing this!
Prioritize higher interest debt
It never hurts to reinforce the importance of ending the debts that charge the highest interest. These are the accounts most likely to become heavy debt. Focus on doing their renegotiation and settlement!
Cut unnecessary expenses
Once it is clear how much money you receive each month and how much you are spending, you will begin to look carefully at each type of purchase you are making. At this point, many of those “impulse buys” will emerge and you will eventually realize that they weren’t even that necessary. With everything noted in a spreadsheet, you can evaluate and cut unnecessary expenses.
And don’t think that doing this is very difficult, as even taking a lunchbox a few times a week or going to work by bike already helps cut spending. Even small actions in your daily life, such as taking a quick shower, turning off the lights when you leave a room, unplugging equipment and making a shopping list before you go to the market, will save you a lot. Little by little, a little money will start to be left at the end of the month!
Set goals in your budget
Set goals to achieve in the short, medium and long term with your money. Plan what you want to buy and set aside a portion of your salary to save for that purpose. When you start cutting back on unnecessary spending and seeing your money left over at the end of the month, instead of spending money like there is no tomorrow, you can save money to meet your goals.
Take off an extra income
If money is not left over or is actually missing to pay off your debts, the tip is to look for ways to get quick money so as not to fall into default statistics. You can make a nipple, start making sweets, crafts or other activity that you are good at starting to sell.
Inside your closet is also a lot of money standing in clothes, shoes and watches that you no longer wear. Selling these items is also a good way to raise money and settle bills at the end of the month.
Research long before you buy
The internet is here to help you research prices for every possible product. Before you decide to buy something, calmly research different sites for value ideas. Do the same thing by “kicking” the shopping streets and don’t be shy about haggling before you buy what you need. This is a golden tip for every consumer, but when it comes to a person who is in debt or has just gotten out of trouble, every economy is a reward.
Negotiate your spot purchases
When you have the money to make a spot purchase, the chances of winning a discount increase. Once your personal finances are up to date, do your best to save your money and try to buy what you need insight. The satisfaction of not bringing debt home will be great!
Reduce card and overdraft limits
A more radical way to control spending and avoid debt is to lower the credit card and overdraft limits. If this balance is not available, you have no way to spend it. It is almost a “no temptation” way that works in everyday life.
If you really need to buy something on credit, only use the card if you really can repay the debt in full within the next month, don’t pay it back! That way you have more control over your budget and don’t spend more than you can.
Withdraw money to spend during the month
One thing is fact: When you watch the money cup disappearing from your wallet, the reality shock of unnecessary spending, which can trigger a more serious debt, is clear before your eyes.
Therefore, those who need to control finances to get out of debt can withdraw a buck, which does not compromise the budget at the end of the month, to spend during a ride. The idea is not to go to the mall or the market, for example, with a credit card – leave the “plastic money” stored in a drawer at home. Many times, we buy things on impulse that we don’t even really need. Without the card in your wallet, you do not risk falling into this trap.
Clear your debts before the end of the year
If you need to raise money fast and without paperwork to pay off a high debt, make a loan simulation here at Bcredi and stop throwing money away with exorbitant interest payments charged by many banks, swapping high-paying debt that compromises the budget in the bank. end of the month for another option with installments that fit in your pocket.
The secured loan is considered a low-risk operation and as such we are able to offer attractive interest rate loans starting at 0.99% per month. Anyone who has a house, apartment, office, or even lands on their behalf can apply for this loan, which has a long repayment term of up to 180 months. The whole process is done online, without the hassle and without having to go to an office in person – even the documentation is sent over the internet and, after approval, within 10 days the money falls into your account!
You can close the year in blue by getting out of credit card debt or overdraft to start a new phase in your life. Come talk to us!