How to manage debt wisely ?

Debt is not something bad, as long as we are good at managing debt. With the debt facility, we can even finance a variety of financial goals. But if not careful, the debt can cause us to lose our wealth. This can happen especially if you take a debt without a good financial calculation. Most of the errors of using debt are resulting from things that are sentimental. For particular people, more debt problems cause by psychological things.

The amount of debt had highly accumulated as a result of the accumulation of bad use of money. The money is used to eliminate a specific problem, but it is only temporary. It does not solve the real problem. Firstly, identify what things can cause you to use the debt excessively in order to avoid the debt trap.

The signs of debt trouble

What is the condition of your debt? In fact, you are reading this article proves that debt is an important issue that concerns you. Here are the signs that show that your debt is problematic.

- Ratio of total outstanding debt to assets is greater than 50%.
- Ratio of total mortgage to the regular income of more than 30%.
- The balance of the savings that more and more depleted.
- Taking cash advance from credit card becomes more often.
- Assumes that the balance transfer facility is the perfect solution to the debt problem.
- Received various warnings from the bank
- More difficult to save money.

Dos & Don't when having the debt problem:

1. Do not hide
2. Do not panic
3. Do not rush to pay off
4. Do not add debt
5. Create a plan (financial plan, debt payment plan)
6. Proactive
7. Negotiation/refinance
8. Skimp

Debt settlement plan:

1. Create the data to whom you owe and how much.
2. Calculate the total amount of mortgage debt to income.
3. Determine the income that can be allocated to pay off the outstanding balance.
5. Negotiations to the debtor.
6. Monitoring.

Debt relief plan

Step 1: Make a list of records of your debt.
Step 2: Set the priority of debt repayment.
Step 3: Stop using credit cards and avoid 'digging the new hole'.
Step 4: Make a record of mortgage payments and save the receipt.
Step 5: Take control of your spending.

The process for each person become wise begins from good habits done with faithfully and continuously. The more we stand in having a good attitude in managing ourselves into a better direction, will always produce the regularity of life and include the regularity of financial management. With proper financial management people can reduce their debts and replace them with personal financial planning that will further enhance the quality of personal and family life. Let us become wise. :)

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