Most people don’t like the idea of being in debt, and for good reasons. It’s unsettling to know that you owe someone money, and it can feel like a burden when you have to use a fraction of your salary each month to make payments.
However, the truth is, most of us have some sort of debts – home loans, car loans, education loans, personal loans, or business loans. Loans enable us to do many things, and can be a brilliant source of help. The problem only comes when we have too much debt, and are struggling to pay them back.
When that happens, a thorough overhaul of your financial lifestyle is necessary to help you get back on track. If you are trying to reduce your debts and work towards a debt-free life, here are some things you can do:
Cut back on spending
It goes without saying that to save more money to repay those debts, you need to spend less. This means doing away with the unnecessary things in life, like lavish café brunches or the latest tech toys. Go back to the basics of differentiating your ‘needs’ and ‘wants’, and spend only on the ‘needs’.
The best places to start are the significant cuts that will make you see and feel the difference. For example, downgrading a phone plan, or cancelling that cable TV subscription.
Living a simple lifestyle can be incredibly tough for those who are used to spending freely, but through it, you might also glean a new perspective of life – that happiness can be found even in simplicity.
Sell belongings that you have no use for
When most people think of earning more money, they think of taking on multiple jobs. However, there are also ways you can earn without taking up too much time, and one of those is by selling your belongings.
With online marketplaces becoming more commonplace today, it is easier than before to sell off your unwanted clothes, appliances, and more. It doesn’t take up much of your time, and you can negotiate deals even while holding down your day job.
Pay off high-interest debt first
Aside from finding ways to save and earn more money, the key to settling debts is also to tackle the problem strategically. The problem with debts is that they accumulate the longer they are not paid, whether in terms of interest fees or penalty fees. Thus, to ensure you don’t rack up even more costs, it is wise to pay off the high-interest debts first.
Another strategy you can take is to take a low-interest loan, like a personal loan, to repay a high-interest loan. So, while you still have debt, the interest fees you accumulate won’t be as high.
Use a debt consolidation loan
When you have multiple outstanding debts, it can be very overwhelming trying to keep up with all of them. A good way to solve this is to transfer these loans to a debt consolidation loan. Most licensed moneylenders offer debt consolidation loans, which help people turn multiple debts into one. This makes it easier to pay, and reduces the amount of interest fees across multiple loans.
With these approved debt consolidation loan companies, the repayment schedule is usually also more long-term and flexible, so you can find one that matches your financial ability.
It is never easy trying to tackle piling debts. But with some concrete steps, you can work your way towards a debt-free life, slowly, but surely. If you are looking for low-interest loans or debt consolidation loans in Singapore, you can enquire with us to know more.