One of the most depressing situations you can find yourself in is getting into debt. Sometimes, we get into debts because we need to, but a number of times it is because of our poor planning. Years back I got myself into a debt that took me through one of the worst experiences of my life. But along with it I learned lessons that have stayed with me throughout. I learned a few steps that helped me get out of the debt in what I would term as record speed. Below are the steps.
Budgeting is key
One of the reasons why people get into debts is because of poor planning. Spending money randomly and impulse buying are among the things that lead people to a poor financial discipline. When I write down my budget, I get to understand the things that are important and remove those that are not important. This also helps me to include the debt as part of my spending so that I know what parentage to use for repaying the debt.
The best part of budgeting is that I know where exactly every penny goes, so I have the ability to avoid spending on things I will regret. When budgeting, honesty is the best policy as it is very important to be honest with yourself on how much you can spend on repaying the debt.
Discipline is very mandatory
One of the worst mistakes you can do is borrowing money while you already have another debt. To be safe, ensure that you have cleared the other one before borrowing another one. I found myself in this situation and I ended up going from bad to worse. I had to train myself to resist the temptation of having to borrow again.
When I stopped borrowing, I realized that I had been spending on things that were not necessarily helpful to me. I realized that I could still stick to my earnings as an athlete and pay back the debts I owed.
Organization is also key
The best thing to do is to organize your debts by adhering to stack methods. Often people think that if they pay debt from the smallest to the largest, they are able to clear it fast. However, I tried this and didn’t see desirable results. I prioritized the debt with higher interest rates and cleared them in that order. When I organized my debts in the order from the high-interest ones to smaller-interest loans, it helped me build momentum. It also boosted my belief that I could get out of debt if only I stuck to my plan.
While I cannot live without debts, I have learned as an athlete that I can manage my debts by observing these tips and tricks. Now, I am able to plan my finances and achieve my goals better than before.