Living a life without the burden of debt termed by many as necessary evil is possible. In this 21st century, most people take advantage of credit cards offered especially the youths and all they think of is how to get out of the debt zone. From student loans, car loans, mobi loans to even mortgages payments. The situation worsens more when you are ‘broke’. Life becomes a living hell where every cent ought to be treasured. How do I pay my debts when broke? Here is a clue;
Changing money mindset – Our behavior with money is what leads to debts and if one strives to get out of debts you ought to focus on changing your mindset about money. This is when you focus on what you cannot achieve because you lack money. Treating the 1 dollar as the only money you have got. That is changing from being a spender to being a saver. It’s never easy but when you are in debts and all you wish is to get out then that is the least you can decide to do.
Controlling your spending – When you are in debts, it means you have been living beyond your means. Once you have changed your mindset on money then controlling how you spend money becomes an easier task. Ask yourself where your money goes? I know there are many reasons why we find ourselves overspending and even ditching much deeper into debts but then do you have to? Is what you are purchasing or service getting that urgent? Is it worth getting into debts? If catching up with friends in malls and movie stalls is what makes you overspend, change your hobby. Think of leaving behind your credit cards and extra money at home if that pushes you to purchasing everything along the streets.
Build emergency fund –Time and again we find ourselves using credit cards as backup when unexpected expenses arise as they will always do. When in debts try as much as possible to avoid to have backup to cater for the unplanned expenses. Think of having an emergency fund account, grow it before using it. This will help you to always avoid overspending instead save the little amount for emergencies. In case of debts, it will help you to pay them with ease.
Live on budget -When in debts, sticking to your budget is the least advice one can give you. Come up with an affordable budget plan and stick to it. This will ensure you pay off the debts using the extra money.
Set realistic goals – Being in debt is making you uncomfortable? What are you doing towards the same? Have an objective which will drive you to being debt free. Set reliable time goal that will guide you through paying your debts.
Side hustles – Remember, a part from having a debt to pay, you have to cater for your daily needs and meet your bills too. This will call for extra hours of hustle to find enough money. You can decide to sell out what you don’t need from your house to get some quick cash to help you pay off the debts. Opt for cheaper options while out for shopping to save a little more cash.
Have a debt pay off plan -Come up with a repayment plan to help you pay off your debts. After all strategies are laid, think of the method you will use to pay off the debts. We have; Debt avalanche method where you will focus on paying the debt with high interest first followed by those with least or no interest. This will help save money on interest. In Debt snowball payment, one focuses on paying off the least debt first or rather debts with less balance. This offers positive results within few times hence gives you courage to pay off the rest.
It’s never easy to come out of debt especially when you are ‘broke’ but view getting out of debt as a reward. Pick one of the methods you are comfortable with and stick onto it. You will soon get to see the progress.