Resolving debts without debt restructuring Discover The Golden Tips Here!
Solving debts without debt restructuring is better for your reputation and better for your past. That is why it is important to prevent these types of problems. Read the tips below to find the best way to solve your debts without debt restructuring .
4 Resolving debts steps without debt restructuring
Step # 1) Prepare for the unexpected Big Bill
The first step in ” resolving debts without debt restructuring ” is about a one-off large expense that is slightly too large to be paid with your monthly salary or by saving a few months.
Many of these debts are investments in assets that will rise or fall over time. The most common example is the purchase of a house . Very few people can save enough money to buy their house outright or pay their entire house with a few payslips. We use a mortgage to pay for that house afterwards and enjoy our home ownership.
Another example is investment in education . Many people cannot afford to pay tuition fees, so we take out a loan. We then plan (or assume) that our future source of income will enable us to pay for the education afterwards.
The insidious type of one-off large costs are the charges that are not an investment. The urgent, unexpected, unplanned bill ! Extreme medical bills, disability, bankruptcy of a company, a court case judgment or long-term unemployment. These bills can put pressure on a family to leave home or file for bankruptcy. They will never be able to pay off the debt with their income.
One way to combat this danger is to set aside three to six months of your expenses in a special savings account. An emergency fund. Specially for this type of emergency and unexpected costs. This money is holy! Only for a family case. The emergency fund saves your family from potential tragedies and helps you create a safe future. Can you do this? Then this is already your first victory in resolving debts without a debt restructuring.
Action: Open a special savings account as an emergency fund
Set aside some money every month . By depositing some money in your own emergency fund, you save money for unforeseen costs. But promise yourself that you don’t buy useless things with the money from your fund.
Step # 2) Think outside the budget box
The next tip about resolving debts without debt restructuring is : Do n’t worry about budgets . As soon as we have a debt problem, we immediately understand: We stop opening the accounts, we stop answering the phone. We try to make budgets, lower our expenses, stop the internet subscription, live a minimum, everything to prevent bleeding.
But sometimes over-spending is not the problem.
You simply can not earn enough to pay for your life. I’m not talking about living in an extravagant lifestyle, or even a “fun” lifestyle. But the basic needs of life such as; housing, insurance, groceries, gas, clothing. This can go pretty well, considering your income. This is especially common in expensive residential locations.
The first step to address this problem is to stop feeling guilty . You are not a bad person who spends irresponsibly. You are someone who must acknowledge that you need more income and want to earn more.
Instead of remaining in your guilt, you start taking action. Promotion to generate more income. You may not have to do anything radical. Maybe you should just do what you already do. Or search for the hidden treasures in your life.
Make a proposal for your boss and describe how the company would be better if you were given a salary increase. Create a new information product to generate passive income for your company. Search your attic for spulletje s you put for sale on Marketplace. Increase your knowledge to create a new chance on the labor market. Or you learn the things to save money. For instance; you learn how you can perform simple repairs at home. This saves you the costs again on a repairman.
Whatever you do, the most important idea is to start today . Or too, take action immediately!
Action: Brainstorm 5 ways you can earn more income
That can be; ask for a salary increase, look for a new job, start a small company, sell a new product, sell your old things on Marktplaats, rent a room, learn a skill, etc ..
Step # 3) Plan for the major expenses
This step is about debts that creep in unnoticed . You pay your bills and expenses every month. But what happens if the car breaks down? The tax on real estate arrives? Has your salary already arrived? Christmas? Baby is coming? Mandatory boring birthdays? The big family vacation is coming ..
Can you pay all this with your salary or does it all go through the credit card?
Car repair, bicycle repair, gifts, taxes and travel. All examples of expenses that are not monthly but can be expected . We know they are coming, but not when or how much. These expenses cannot be on a credit card. You must save in advance.
View your bills, expenses and income for the last year . Calculate what you spend on all these things on average per year. If you do not have this information, make a realistic estimate. Divide that annual amount by 12. The result is the amount that you must reserve each month for your irregular expenses.
Promotion: Open a special savings account for at least one unusual expense
For example for taxes, travel or gifts. Set aside a fixed amount every month. And use this special savings account only for what you have established it for.
Step # 4) Close the holes
Step four is about how you prevent your family from getting into debt . This by, among other things, planning your expenses in advance. And with this step we come to the most insidious problem and also the most difficult one.
Do you know where your money goes every month? How much do you spend on new phones or new subscriptions? Clothes? Personal care? Recreation? Movies? Netflix? Toys (for both the children and yourself)? Do you really know?
Do you spend your money in accordance with your values and priorities? Do you spend more money on certain things? Not because you need it per se, but simply because your boyfriend or girlfriend also has it. Or that you like it yourself.
We usually see that expenses are easily made for clothing, toys, leisure activities, high-tech gadgets and other things. It seems like a small expense, but if you do this more often and add it up, you will come up with a reasonable amount. These are expenditures in which you quickly spend without thinking. And in this way even the expenses can be more than what comes in every month.
Instead of staying in your guilt, do something about it ! Look at your habits in recent months and choose the most obvious problem area. Do you buy it because you are stressed, out of boredom or unhappy. Do you buy CDs? Do you often shop online? Should you need to buy those extra shoes if necessary? Start in one category. Create good habits and rules for yourself in that area. Expand the personal rules over the rest of your expenses.
Action: Create a cash department for your problem category
Put in an envelope the (monthly) amount you want to spend . Buy the nice things that you want to buy. If the envelope is empty, then it is ready! Are you short of money for what you want to buy? Then do not supplement it with your other budgets. Instead, keep the money in the envelope and top it up again the next month with the amount in accordance with your budget.
Solving debts without debt restructuring
You can see that it is quite possible to stay out of debt restructuring . It does require a certain degree of discipline . Don’t stand or think about your problems. But take action . Be an entrepreneur. Only then will you see results. And continue to maintain especially in the good things that you are doing. Then you will see that you are able to resolve debts without debt restructuring.