Do you have both debts and savings? Chances are you are dangerously overspending your money and you are in a crucial situation. With the wide availability of credit and lending companies, acquiring debt is relatively easier to do today. Obtaining debt can be as fast and easy as you can imagine but repay it may take quite a long time and it could be the start of a greater financial burden.
Debts are very common now, loans are easily available on high interests, and as a result, you end up giving up a lot of money if you are not in time. So, what can you do to pay back debts in time? Can you earn more? If yes then it would involve working extra time, which would, in turn, make you unhappy and unsatisfied. So alternatively you can take proactive steps to save and pay those debts faster. It’s just a matter a few months and then you can resume your normal lifestyle. Why is it so? Read a little more.
How to Save Money and Pay Back Your Debts?
First, watch your phone and mobile bills, if one of them is not used, I’ll get it disconnected or switch to a cheaper plan. You can also try to switch to a cheaper internet plan and set a cap. Next up are the regular supermarket expenses, do not try to be extravagant, live modestly, and do not be impulsive buying things. Make a firm plan and stick with it, do not be driven by your greed.
If you’re a member of clubs, libraries, or gyms and you barely use it, the best idea would be to cancel it. Many people pay large sums for their gym membership, but do not go at all. Even if you need to work out daily, take yoga and jogging for a while.
The mode of your trip is very important, try to use public transport as often as possible. If you can not skip a car, use one with a smaller engine and more mileage. Saving fuel is a great way to save money while doing something for the environment. Finally, do not buy anything new and stop using your credit card until you repay all your debts. If you still find it, contact a debt management expert licensed money lender in Singapore and look at some debt management solutions.
Getting out of debt is definitely a difficult thing to do especially when you are regularly plagued with utility bills, phone calls in the workplace and letters from lending companies. Over accumulation of debts can give you emotional and psychological burden and in worst cases, it can cost you your assets and properties.
What to do if you cannot repay your debt within a year?
In the worst case, it is usually observed that a private person, who can no longer afford the loans, takes heavy steps that are terribly sadistic. To avoid such contingencies, debt management plays a necessary role.You are spending more money when you save and acquire debt through your credit card at the same time. In simple terms, when you save money in your bank account, you are in fact lending your cash to the bank. Then with probably a credit card from the same bank, you are again borrowing money from your bank with a higher interest rate.
The big difference between the interest rate of your saving account and the rate they charge you with their credit cards is actually the bank’s profit. It is simply ironic because you are actually borrowing money from a bank with which you have lent money with. And with their profit due to the difference mentioned, it is causing you to be in a very disadvantaged position because it always costs more to borrow than to earn from saving.
This is the reason why I understand and feel sorry at the same time with this attitude of people. These people who have both borrowings and savings with the same bank are just working hard to become slaves of their own banks. In actual fact, it is a ridiculous cycle of lending you back the money you lent them and with them having the profit.Inability to pay your debts on time may incur drastic negative impacts in your life.
The concept of having some extra cash in their savings account gives most people a sense of security. But with the situation of keeping the debt aside just to save up and accumulating the interest charges, that is having a negative gearing every time. This leads to ultimately drying your emergency cash fund in your savings without knowing it.
The best thing to do is pay off your credit card debts with your extra cash in your savings. Even if this includes your emergency fund, it is still the best move to do. The main caution though is not to cut up the cards this time when you used up the savings. It is imperative to keep the credit cards available for now in case there is an emergency. Until you amassed the necessary amount in your savings after paying off the credit cards, then you have the option to stop using the credit cards altogether.
The solution is very straightforward. Pay off the debts before you save any amount. It is a simple concept of breaking old rules which are probably marketed by banks themselves. At least, you break free from being their slaves after all.
Being in debt is no fun, especially if you find that you barely have enough money to make it from one payday to the next, with no money to put into savings left over at the end of the week. The secret to helping you get rid of debt is to learn how to modify your behavior when it comes to spending money, allocating more money to your bills and your savings account each month.