How to get out of the debt trap

Over the years many people have found themselves getting into debt and finding it difficult to get out of this dangerous but avoidable trap. Think of the ever increasing price of daily necessities (food, fuel, accommodation etc), higher interest rates and just about everything getting more expensive. The rate at which people get into debt prompted me to consider putting this article out. Here are some good ideas on saving rather than getting into debt. It will help on the long run. So if you like to get out of debt follow these simple but effective steps.

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• Desire to get out of debt. Personal discipline.

1. • Draw up a budget: a budget covers a list of your total income less your expected expenses. Some of these expenses are fixed while others vary from month to month. Your budget does not have to be a complicated document it can be done with just a piece of paper and a pen, using a calculator to do your summation ad subtractions. Some of your main expenses will be in the following categories, accommodation, transport, insurance, school fees, living expenses, saving and investments, living expenses, feeding etc. Put all this on your expenses list.
   • Consolidate Your Debts: In case you already have a set of debts, particularly high interest debts such as credit cards, you can borrow from the cheapest source to pay them up and try to pay off the new debt as soon as possible. The cheapest way of doing this may be by increasing your mortgage bond.
2. • Pay Off Your Yond More Quickly: You can achieve this by increasing how much you pay on your bond, an extra $100 will make a big difference, and you can actually save tens of thousands of money over the period of the loan.
   • Pay Yourself First: If you are like most people who seems to have nothing left after buying and paying everything you need to ,then try putting something aside for yourself as soon as you get paid each month, no matter how little.$100,$50 soon begins to add up in time.
3. • Consider The Rate Of Power Consumption In Your Household: when you need to boil water for tea don’t overfill the kettle just boil the quantity you require, it will also make the kettle boil faster, turn down your refrigerator when you are going to be away for more than a day, this saves you on electricity payment. Use low energy consuming light bulbs, they also last longer.
   • If You Must Borrow, ensure that you borrow only for investment purposes and not for consumption reasons, this helps to bring a return as well as pay the debt back. Try to buy on cash avoid using your credit card except in extreme and necessary instances.
   • Exercise discipline: Financial discipline is not in born you need to learn to spend within your earnings and not above .This require s you to ensure you spend only on needs and not wants. I have discovered that our needs are actually less than our wants.Dont ever allow yourself to be enticed by the mouth watering offer of loans that are thrown at you by loan sharks every now and then.

Tips & Warnings

• When you are trying to get out of debts the most important factor is you.
• Try as much as you to ensure you cut out unnecessary expenses.
• the key is to settle the necessities first
• Above all if you can,avoid borrowing at all.
• Get an extar source of income