How to get out of debt. Simple recommendations for financial literacy and discipline

19.01.2025/23/00 XNUMX:XNUMX    347

 

Getting out of debt can seem like a daunting task, but with the right approach and discipline, you can quickly achieve financial freedom. There are a few rules to follow.

Debt is not a sentence, and even in a few months you can make significant progress in paying it off. The Telegraph will tell you exactly how.

Analyze your financial situation

  • Make a list of all your debts. Write down the amount of each debt, the interest rate, the minimum payment, and the due date.
  • Estimate your income and expensesUnderstand where your budget is going and identify which expenses can be cut.
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The "snowball" or "avalanche" method

  • The "snowball" method. Pay off the smallest debts first, gradually moving on to larger ones. This gives a psychological effect of victory.
  • Avalanche methodPay off debts with the highest interest rates first, which saves money in the long run.

Set a clear budget

  • Set aside a fixed amount to pay off your debts each month.
  • Reduce spending on entertainment, clothing, or other non-essential purchases.
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Avoid new debts

  • Ditch the credit cards. Use only the funds you have.
  • Plan major purchases only after paying off your debts.


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