How to get out of debt? A practical step-by-step guide


Currently, we offer various types of loans at almost every step, which are offered by traditional banks and other financial institutions. In addition, there are attractive limits on debit cards and of course credit cards, which are very often used by a large number of Poles. Spending money has never been easier, but accumulating debts can simply outgrow us at some point. What to do when subsequent commitments are pending and our wallet is empty? Here are some tips for getting out of such situations unscathed.

End the debt spiral

End the debt spiral

When our debt begins to grow at an alarming rate, often our first thought is to get a quick loan to pay it off. Unfortunately, the conditions for taking out such loans are not very favorable, which is why we are once again at the starting point, often with even greater debt on the account. This is the so-called debt spiral, which seems to have no end. Therefore, the first step to getting out of debt is simply not to make it even worse. 

But refraining from borrowing money from banks is not the only thing we have to do. We also cannot use debits on cards and raise credit card limits. In fact, if you are in serious trouble, you should consider completely giving up your credit card. Many people for whom the use of this means of payment is too tempting, even decide to destroy it so as not to be able to use it.

Look for extra money

Look for extra money

When we stop the avalanche of successive debts, it’s time to look for ways to get additional funds that will help us slowly dig out of it. The first thing we should do then is to analyze your own budget. In many cases, we don’t even realize how much unnecessary expenditure we have, until we write them all on a piece of paper. And as our debts continue to increase, every smallest expense becomes a real burden for us. The apartment and related fees, food, medicine, transport to work, or necessary expenses for our children’s needs – all this is a priority. Any other expenditure, such as lunch in the city, a taxi to the center or new electronic equipment, must wait for better times when we are free of any debt.

But cutting your home budget is not the only way to find extra money. It may also be helpful to review the contents of our wardrobes and storage compartments, and then sell all items that we do not use. Thanks to websites with online auctions, selling them should not cause us any major problems. And the money earned in this way can be used to pay off our obligations faster.

If we can, we should also find an additional source of income. You can register to work after hours or get involved in more projects. The solution is also occasional work, even as a pizza supplier or a person walking dogs. Any occupation that will provide us with extra income is worth our attention in such a situation.

Analyze your debts

Analyze your debts

The next step on the path to financial freedom is to analyze the type of debt and wisely plan their repayment. Therefore, you should read into each contract concluded with our lenders and write down the amount of individual installments, their interest rate and the amount that we still have to pay back. In a situation where we are struggling with several different debts, it is necessary to decide which of them should be repaid first. Debts that affect our daily operations, and therefore charges for electricity or rent, should usually come first.

Payday loans, whose interest rate also costs a lot, occupy the next place. And in the end put the remaining debts, from the largest amount to the smallest. Focusing on paying off subsequent items on our list will allow us to notice the first effects of our efforts in a shorter period of time. And debt melting and tangible results of actions taken will be the best motivation for their continuation.

Getting out of debt is not so easy

Getting out of debt is not so easy

The above three steps to get out of debt may seem quite easy to implement. However, you must remember that they require a lot of discipline and patience. The indebted person often has a problem with restrictive control of his expenses, so he must have a lot of self-denial in order to actually reduce it to a minimum.

It is also worth remembering that nothing happens in a few days, weeks or even months. Of course, a lot depends on the amount of our debt, but in most cases getting out of debt is a long-term process. We should therefore be prepared for the fact that the situation, when our finances will be subject to constant restrictions, will last even several years. However, it is worth clenching your teeth and trying hard to one day feel extraordinary relief with the payment of the last installment of our last debt.

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