If you are careful with your finances and want to achieve wealth and financial freedom, you should not be in debt at all. If you are in debt, you should get out of there as soon as possible.
That is, before you do anything else, you should get out of debt first.
Because no matter how much you invest, you cannot benefit because the interest on the debt is always greater than the return on the investment.
Take, for example, you have invested 1 million, and per year you get 10 percent interest, so per year you get 1 lakh. But at the same time you have a debt of one million and you pay 18 percent interest, then per year you pay 1 lakh and 80 thousand.
If you look, you become You have lost $80,000 in paying interest. So it is better if you use $1 million to pay the debt so that you stop wasting money on paying interest on debts.
To get out of debt for sure, follow these five steps:
One: Know All The Debts You Have.
Add up all the debts you have so you can know how much you owe. Remember, you want to get rid of all debts completely, so add them all up without leaving a single one.
Two: Set up a payment plan.
Plan how you will pay all the debts you have. There are two ways to pay: one is to pay the debts with high interest first, and the other is to pay the small debts first.
Choose the method that works for you, but it is better to pay the higher interest rate first to reduce the cost.
Third, apply for an interest discount.
Talk to those who owe you and ask them to give you a discount on interest by promising to pay on time. Since most want to get paid, they will be willing to give you a discount.
And if they refuse to give you an interest discount, then reduce the time to pay; when you pay the debt in a short time, the amount of interest you pay is also reduced.
Four: Find Out Where Your Pay cheques Come From.
Once you have made a plan to pay off debts, you should know where the money to pay those debts comes from.
There are two ways here; one is to greatly reduce costs and a large part of the income to pay off debts. and two is to increase income, and the increase goes towards paying off debts. Work both ways to get out of debt faster.
Five: Don't Go Back into Debt.
There are people who tend to transfer debts; they borrow from one part to pay another part, so they remain in debt more and more. But there are also those who pay their debts, but because of bad financial habits, they find themselves back in debt. Once you get out of debt, stop yourself from going back.
So make sure that spending is less than your income and that you have emergency savings so that when anything happens you don't find yourself going back to
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