How To Manage Debt: 13 simple and practical ways to get rid of debt

How to manage debt is a very vast concept. Only because of one reason that many people struggle with their financial knowledge and they get into the trap of debt. In this article, you will know how to get rid of that debt simply and practically.

What Is Debt?

Debt is anything owed by a person to another person. This was a definition of Debt. For example, let’s say you borrow $5000 from your friend. In this case, you can say that you have a debt of $5000 from your friend.

Types Of Debt

There are two types of debts one is good and another one is bad debt.

Good debt is related to your education loan or anything which will give you in return in a positive way in that case you can call that good debt.

Whereas bad debt is something that will negatively impact you for example you buy a costly phone that debt can be named a bad debt.

What Is Debt Management?

The management of debt properly and systematically with the help of any financial advisor can be known as debt management.

Why does One Get In Debt?

Few might take a debt consciously while most get into debt unconsciously. There are two reasons why most get into debt first is lack of calculation. The second reason is the lack of financial planning.

Effects Of Debt

If you don’t properly take debt you will have to face lots of side effects of getting into debt some of which are listed below👇🏿

• Hypertension
• Anxiety
• Depression
• High Blood pressure
• Stress
• Anger mode is activated most of the time 😜
• Feeling Lonely

How To Manage Debt

13. Calm down

Before managing debt you have to manage your emotion so that you can have a relaxed mind and you properly take decisions that will help you to manage the debt quickly and easily.

12. List down all your debt

This is the important step that you should know how much debt you are in so that you can track that for that you have to list down all your debt whether it is a personal loan, car loan, home loan, education loan, or any kind of loan you had taken in the past list down everything so that you can have an eye on your debt. So that you can control it and get it out of it as soon as possible.

11. Know the interest rate

After you list down everything then you have to know the interest of all the loans that you had taken for example let’s say you have taken some loans, okay and their interest rate can be like 12% 22% 7%15%39%.

10. Start paying off the small interest-rate debt

Once you know the interest rate of all the loans you have to start paying off the small interest rate first and so on. You will clear your debt which has small interest first then second then third and so on In the above example first you will clear a 7% loan then 12% then 15% and 22% and 39%. You will be happy that at least you are clearing some debt.

9. Say no to an unwanted loan for upcoming days

If you seriously want to clear all your present loans for that you have to stop your future loans so that you can focus on your current loans and get rid of that loan first.

8. Avoid overspending

Avoid overspending if you avoid overspending you will save some extra money and from that extra money you can pay the loans as quickly as possible and you will get rid of that debt soon.

7. Increase Income

Increase your income if you are not able to pay off your debt with your current income source. Start doing a side hustle that you can make extra money from that also you can start clearing all the debt you have.

6. Say no to your wants and desires for a few months

Stop your unnecessary desires and wants for a few months if you are serious about clearing all your debt quickly. If you want to struggle with your debts enjoy your life by fulfilling your wants. I know you don’t want this so say no to your wants for a couple of months and debt once your all debt are clear you can enjoy your wants and desires too.

5. Sell unwanted things

Sell unwanted things which you don’t want so that you can get some money and you can use that to clear your debt. You cannot clear all debt but at least you can clear some amount on that which will give you some relief.

4. Pay loans from other income sources

This is optional if you have another source of income you can try to clear your debt from that source of income so that you can use your current income for your needs and saving without any pressure.

3. Ask for help

Do ask for help if you don’t feel ashamed of asking for debt why you feel the shame of asking for help. It’s ok to ask for help feel free to do it if you want you can go with this.

2. Financial discipline is a must

If you don’t have financial discipline you will end up getting into the trap of debt. To prevent this make sure you should take care of your financial discipline always. For good financial knowledge read a good article like us 😂 and personal finance books so that you don’t get trapped anytime.

1. Have a self-belief

Have a self-belief that you can clear all your debt on time be positive have patience and work on it every single day to achieve it.

FAQ’s

Any query regarding this comment below and if you want any other article on any topic related to personal finance comment below I will try to make on that particular topic and if you like and understand the concept don’t forget to share because sharing is caring. 😇