Debt ownership is a natural thing for most people. As the cost of living increases and the demand for goods increases, more and more people are looking for alternative lending options. Just take out a KTA loan or use a credit card to keep making money.
Debt is legitimate, but doing it without calculation can be detrimental to us. This depends, of course, on how we manage our finances so that we can effectively repay those debts without experiencing a financial deficit. Unfortunately, many of us still do not have the financial ability to do so.
Inability to Manage Financials Well
These poor financial arrangements have made the debt repayment process less efficient and more volatile. So that debt can be repaid over a certain period of time. In fact, it could be that our debt is growing. There are some simple things we still miss doing that make it difficult to get out of debt.
Some of the following simple things to keep you from getting stuck in a prolonged debt trap. Let’s see what’s below.
1. Don’t Have Savings or Reserve Funds
If you do not have any savings, it is best to take down your intention to pay off as it will increase your financial burden. Focus first on increasing the amount of your savings or reserve funds to spend as needed.
Not having enough savings or funds can be a problem if you want to apply for a loan or use a credit card. So you become used to being in debt rather than supplementing your savings to meet your needs.
So that you do not need to be tied to debt, try to always prioritize increasing your savings or reserve funds so that you can use your time to meet your needs.
2. Always Postpone Payment and Pay Only the Minimum Amount
If you have a bill or installment, making a minimum payment to avoid burglary is fine. But doing so will only increase the length of your loan.
Many of us pay only a small loan or credit card installment. In the short term this can be mitigated, let alone do it once or twice. But doing so periodically will increase the length of our installment. It can also become an unhealthy habit.
Because of the previous installment, we have added another debt that needs to be repaid. Paying for this minimum amount can also make our credit records worse than paying the full bill every month. To prevent this from happening, make sure you always pay your bills on time according to the appropriate amount each month,
3. Extraordinary Lifestyle
As much as possible, do not owe it for prestige or extravagance. We need to keep our needs and desires balanced at all times.
Extraordinary lifestyle is one of the reasons we decide to owe it. This is due to high demand for lifestyle choices. Life-saving and extravagant is a choice.
If you choose to live extravagantly and follow prestige alone, sooner or later you will accumulate debt. Of course, this is because you buy things you really don’t need. So the desire to be in debt is greater because it is not able to separate the need and the desire.
Don’t make debt a way to meet your wasteful lifestyle. Buy items according to your current financial needs and conditions so that you don’t owe it. It’s a good idea to save money first and buy cash for cash.
Apply Simple Lifestyle
To get out of debt, the most important thing to do is to adopt a simple lifestyle. With a simple lifestyle, you can manage your finances more effectively with no extra expense. You can also find out what you need to buy according to your needs,
Lastly, if you do owe it, make sure you pay it on time and within your means. Also, make sure that the debt is being used for profitable long-term needs and not just for your own sake. Happy Trying!