Last week, I’ve just wrote about on the Money- Saving Process. In this article I’ll share the article from same brochure but on different title – Get Out Of Debt.
It is important of us to settle our debt as soon as possible. You can follow this 5 Steps to get out of debt
Step 1 : Face the problem
– The type of debt you have, the cost of debt, what you owe, your repayment each month, when you will have repaid the full amount, which debt has the highest interest rate.
Step 2 : Share your problem
– This will help keep you focused on your goal of being debt free.
Step 3 : Adjust your budget
– Enabling you to repay your debt quicker.
Step 4 : Create Strategies to deal with your debt
– Which debts pose the biggest threat?
– How do you deal with your creditors ?
– What are your options?
– Will you be blacklisted ?
– Is there a sensible level of debt?
– What is the sensible level of debt for you?
Step 5 : Now new debt
– Stop yourself from buying anything else on credit.
Calculate Your Debt Ratio
1. Work out your total monthly debt repayments.
2. Work out your total monthly income
3. Work out the relationship between your total monthly income and your total monthly debt repayments.
Debt/Income x 100 % = _____
What It Means Percentage of Income Used For Monthly Debt Repayments
0-30 % – This indicates you are mostly responsible about money. Debt is under control and you plan for the future.
30-36% – Heading towards danger 36% is the ‘magic number’ in this ratio – go further than this and there could be in trouble.
37-50% – Danger, potential to be out of control. Reduce debt fast and do not take on new debt.
+50% – Requires Immediate Action. Debt is out of control and causing serious financial difficulty.
In yourfinancialblog there’s many guideliness about getting out of debt. You can search it by yourself and follow which one suit you.