How to avoid debt?
Causes of financial lack of control Every month it is the same: you receive your salary and try to adjust it to the payment of a multitude of bills such as water, electricity, telephone, school, health insurance, rent, etc. How to avoid debt? Since, in general, most people tend to break the first rule of financial planning by spending more than they receive, whether by necessity or lack of budget control, the result is almost always the same: at the end of the month, the accounts are in the red.
To avoid this situation from happening to you, or even becoming a routine, check out the tips below
Cutting superfluous Your first step: cut your superfluous expenses, keeping only the essentials (the expenses you can’t give up). This category includes rent, condominium, taxes, electricity, water and telephone, food, education and transportation. However, even among the essentials, common sense is needed. It is true that you need to have a telephone, but this does not mean buying a cell phone that costs more than $ 1 thousand, or spending more than $ 300 with the phone bill.
When you find it hard to give in to temptation, remember: every saving you manage to make will have a very positive impact on paying off your debts. Changing consumer habits Exactly because of this, the moment is ripe to review habits.
Take the opportunity to save on essential expenses as well. No more long showers or leaving all the lights on at night. In the case of the telephone, the main villains are long distance calls and calls to cell phones. Opt for strategic times when rates are reduced, usually between 9 pm and 6 am on weekdays, and all day on Sundays and holidays.
Avoid calling a cell phone when you can use a landline
If this is not possible, limit the conversation to the time necessary. Do not waste time chatting. In the renegotiation, caution Once the budget is balanced, it is time to think about renegotiating debts. However, the main question is what, or to whom, to pay first.
Give priority to the payment of debts that involve guarantors or that are in the name of other people. After all, no one should have their name go to protest because of their problems. Next, make a survey of the debts in arrears and plan to pay them off. Consider the possibility of paying off your smaller debts in cash and at a discount. This way you have less negotiating to do.
But be careful when negotiating. Extending terms helps, because it reduces the amount of the installment, but if you do not get an interest reduction, you will end up paying even more for the financing.
Try to negotiate a discount on the outstanding balance: depending on the amount involved, you can sell some assets and pay off the debt more efficiently. Taking out a loan to pay off other debts is a risky strategy, which requires a lot of care, and is only valid if your intention is to consolidate several debts into a single one, where the conditions are better. Avoid loan sharks; the chances are that your problems will increase.
Seek specialized advice
You may not know it, but even though you are a debtor, you are protected by the Consumer Defense Code (CDC). Therefore, you should go to court or to consumer protection agencies, such as Procon, if you feel pressured to accept an agreement that does not seem fair to you.
Of course, since this is a moment of fragility, the first impulse is to accept the first proposal and that’s it, but care must be taken not to give in to abusive demands. For this reason, the help of specialized professionals can be very useful so that you don’t fall into a trap.
It’s worth remembering that, to file a complaint or ask for advice, you must have data such as: name, address of the creditor and details about the debt or its renegotiation. Only after you are sure that you have chosen the best option, start paying off your debts and regain your credibility in the credit market. Good luck!