Is it URGENT to pay off your debts? Here are 6 steps to do it as quickly as possible
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
It is common to observe that people borrow money to make the respective payment of their debts. However, this may not be the best solution to your problem. Sometimes it’s seen as an extreme measure, like it’s the only answer to your problems when trying to pay off your credit, just like a card.
If you find yourself in this situation and are worried about losing control of your finances, there are alternatives so that you can gradually pay off what you owe. One tool that can help you orient yourself in a debt plan is the Condusef Payment accelerator method, we will tell you how it works.
For this model to help you, you need to stop your debt, that is, to stop acquiring payment commitments, as of today. That will be the starting point and believe it or not, with this strategy, you can gradually reduce your debts until they are fully paid, according to information gathered from MiBolsillo.
1. Cut your expenses and start saving
10% of your net income should be set aside. If this is not possible, you can check your spending to identify savings options. Therefore, based on information gathered from MiBolsillo, the Condusef recommends the following:
- Confirm the expenses you have made in the past month.
- Make a list of all your expenses and select the ones you can allocate the least money to. This money that you are not going to spend now, save it until you reach the 10% of your income that you need.
In case it is difficult for you to do these steps, you may ask yourself:
- What do I spend the most money on?
- Do I need everything I buy?
- Are there ways to meet my needs and wants while spending less?
The intention is not to stop spending, but to do it more moderately and wisely, as well as selectively.
You can make small changes that will make a big difference:
- Bring food to work, to avoid eating on the street, so you can save a lot.
- Stop smoking, you’ll save too much.
- Avoid overspending on electricity, you can unplug appliances when not in use and turn off lights when leaving rooms.
2. Make a list of your debts
List all your debts and do the following for each:
How much I owe / Monthly payment or minimum payment = Months it will take to pay the debt
3. Organize and list your debts
Prefer the one that you can pay in less time, so that you pay it according to exercise 1.
4. Pay off the debt 1
If you have four debts, Debt 1 (lowest) pay the minimum payment + 10% of your net income (what you saved in step 1). Repeat this month after month until you pay it off completely.
5. Pay off the debt 2
After Debt 1 is paid, move on to Debt 2, cover the minimum payment + 10% of your net income – the minimum payment you updated on your Debt 1. Repeat monthly until you pay all of your debt 2.
6. Keep saving
When you have already paid off all your debts, continue to save 10% of your income and turn the payment accelerator into a savings accelerator.