Debt is something most of individual experience in their early age(maybe through their parents) or in their later age. So to live a healthy life (means free of financial stress and an individual able to meet their basic needs without much stress and efforts) a person should be Debt free.
Here are some methods which will definately helps you to come out of debt :–
Make it your first priority/Target to become debt free and whatever stress or pain you need to take to get out of your debt just do it. Only after getting debt free you will able to feel the life the way it is.
If you spend less than you earn than it will definately help you to get rid of debt. Its a natural side effect. Unless your income is more than your expenses, your debt is actually increasing. If you’re continuing to add debt or if you’re only able to make minimum payments, you must first find a way to spend less and earn more until you have a positive “saving rate”( when individual earn a personal profit, we call it “savings”.)
Say a big NO to credit cards use. In a debt situation they are just act as trap they put you more deep in debt. Cancel all auto mode deduction (eg. netflix subscription and soon) from your credit cards and through it away. Just purchase in cash or with the amount you have in your Bank account.
Here are some more specific steps to follow which helps you to hit hard your debt :-
To follow these steps the first and foremost requisite is to have patience and be disciplined through out the process. Now the steps are as follows:-
(1)Make a list of all your debts in descending order of interest rate (eg. highest interest rate debt will be at top and then lower than that and so on)
(2)Once you have made list of your debts, decide how much extra amount you can afford to pay each month in total. This should be at least the total of your minimum payments(here minimum payment means fixed Emi) and preferably more.
(3)Now pay fixed monthly minimum payment for all of yours debts except the debt with highest interest rate
(4)Add the extra amount that you have alloted in 2nd step to the minimum payment of debt with highest interest rate. By doing so you will pay less amount of interest in long run.
(5)Repeat this process every month until the debt at the top of the list has been eliminated.
(6)With your first debt defeated, you don’t use your improved cash flow to buy new things/luxuries. Instead, you use the extra cash to attack the next debt on your list. By following this in a consistent way you will definately come out of your debt.
So, this is a way we can overcome from our debt but remember this is not the only way. There are other method/strategies also exist which can help you to get rid of your debt .So choose the way that suited you best and boost your enthusiasm/motivation to get rid of debt and become financially free.
In the end the thing which is of most important is to payoff your debts, the order in which you do so is ultimately irrelevant.