Not everyone knows how to calculate the size of a debt. So much so that, according to a survey conducted by Good Finance, 6 out of 10 Brazilians do not know how much they owe, and about 36% do not know how many companies they owe.
To make matters worse, research has shown that debtors have no idea of the number of installments they still need to pay on their debts.
Whoever lives in debt ends up getting lost in debt and, without financial education, it is difficult to organize efficiently. Ignoring the real size of your debt is dangerous because, without being aware of it, the person is at risk of harming himself even more.
Are you in debt and don’t know how to calculate the size of your debt? Then check out the tips in the article to know how to do this calculation and get rid of them as soon as possible!
How to calculate your total debt?
The first step in calculating debts is to organize all your debts on paper or a spreadsheet. Find out everything you owe, such as loans, credit cards, store cards, payment slips, booklets, etc.
Organize them into a single document and add them all up. The result will be what you owe in full. In another document, write down everything you have of money, such as emergency reserve for settling debts, your salary and, if you have, rent rents, freelance and other types of entries and assets.
Once this is done, you will have a sense of how much you owe, how much you receive and a prediction of when you can get rid of these debts with what you earn.
How to pay these debts?
Now that you know the full amount of what you owe, confirm that it is correct. The result of our calculations is not always compatible with what we really owe. Sometimes we forget to calculate possible interest, for example.
So, after completing your calculations, separate the debts to find out which institutions you owe. This will make it clear to whom you should contact to pay existing debts. Next, check out some tips to settle these debts.
1. Renegotiate that debt
Knowing who you owe makes it possible for you to contact these institutions to confirm the real value of the debts and also helps to reach a possible agreement.
Renegotiating debt can be a great way to avoid paying a much higher amount than it was. So don’t be ashamed to go to these places to talk and agree on a price.
If you know how to talk well, negotiation can be advantageous for you. If these institutions have put their name on the Good Finance, you can enter its website, choose the best trading option that is available and pay the ticket.
2. Anticipate parcels
Several people are in debt because of the installments they accumulate. When it comes to debt settlement, one of the smart options is to prepay installments.
Prepayment of installments can yield you some discounts. To do this, check the amount you wrote down on paper or a spreadsheet (remember the first topic covered in this article), analyze the debts and see how much you can anticipate.
In the same survey by the SPC, they found that one of the main reasons for consumers’ indebtedness is the credit card. Depending on the card, you can advance the installments through the application itself to see how much you will save and how much you will pay. The advantage of these digital bank cards is that you do not need to calculate advance payments.
If your card does not have this possibility, you will have to call the call center or go to the agency to talk and calculate how much you can save with the early payment.
If, in addition to anticipating, you can fully repay, it will be even better. If you have an emergency reservation, you can use it for that. Remember to set up a new reserve later, as it is always important to have that money for unforeseen events!
How to collect quick cash to pay off debts?
If you don’t have the money to pay off your debts entirely or the amount is too high, some changes in your behavior can help you make more money at the end of the month. Check out:
- avoid eating too much and take a break from happy hours with friends after work. Do not be discouraged, as this will be temporary;
- change your habits: don’t make new debts and don’t buy on impulse;
- save on home bills: electricity, supermarket, etc;
- organize yourself financially and leave all your debts and assets noted.
You can also make freelas and “nozzles” on the outside to increase your income. Be creative and see what you can do to get more money.
How to avoid falling into debt again?
After paying off everything, it would be stupid to go back to the same debit process as before, right? Therefore, acquiring new habits to avoid falling into the same trap is essential to have a healthy financial life and get money for what really matters. Check out some tips below.
1. Seek financial education
Educating yourself financially is essential to acquire a critical view, to avoid getting into debt and, above all, it will make you use your money wisely, responsibly and only in what is important.
So, read blogs on the subject, books, watch videos and search for courses to acquire this knowledge. In addition, you will learn to invest your money and make it pay off for your future and short, medium and long term goals.
2. Be organized
Make budgets and leave all your monthly expenses noted. That way, you have clarity on how much you owe, how much money you have and how much you can save. A person who has an organized financial life does not waste time trying to pay installments and avoids wasting money on what does not matter.
3. Set goals and objectives
Do you have goals for the short, medium and long term? If not, start defining them now! Those who have their goals and dreams defined are aware of what they can spend and what they should keep in order to achieve them and have a peaceful future.
4. Change your habits
Avoid impulse buying and start getting into the habit of saving every month to invest. Live according to your financial condition, be minimalist, do not overdo the credit card and buy only what is necessary and, if possible, in cash.
Calculating the size of a debt is not difficult. Despite this, it requires organization and commitment to do this efficiently. Knowing the real value of what you owe and who you owe is the first step out of this trap and start organizing your life financially.
The most important thing is to learn from all this so as not to return to the same debt cycle. Therefore, after calculating and settling your debts, seek to educate yourself financially, change your habits, get out of debt to an investor and have a healthy financial future!
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