6 Simple Ways to Stop the Debt Habit, Don’t Always Do it – Being indebted to meet a variety of needs that are not too important will greatly disrupt family finances. Because, by debt you are required to pay the principal expenses each month plus interest. When these health problems occur such as depression, stress, and psychological pressure can arise because of the burden of accumulated debt.
The above are of course avoided and do not want to be felt by many people, therefore you need to get out of the habit of debt which has now become a habit.
6 Simple Ways to Stop Debt Habits
1. Make a list of income and expenses every month
The first step that needs to be done to stop the habit of debt is to make a list of income and expenses that occur every month. Write down all the expenses you incur every month such as, buying food, transportation, shelter, utilities, entertainment costs, and so forth.
The thing to be sure of here is that the amount of expenditure you have must be lower than the income you get every month. Having an income greater than the amount of expenditure is an absolute requirement that must be met in order to be free from debt bondage.
2. Create a budget every month
If you already know how much income and expenses you have each month, then the next step is to make a budget. The budget is made a tool to control spending every month and help you track the flow of money out.When problems arise in spending, you can begin to improve your shopping habits and learn to save later.
If you have limited spending and there are still problems, it means you need to increase the amount of income you get each month. You can start a side business or take overtime hours to increase the amount of income you get each month.
3. Start to Stop Excessive Shopping Habits
Many debts are owned by the community, because they are unable to manage the expenses they get every month. The use of credit cards is a trigger that makes it easier for people to owe when shopping. From now on, immediately leave the credit card you have at home.
You can shop using cash or use a debit card to limit the amount of excessive spending.
4. Save Funds For Emergency Needs
What is often not realized by the public is that many of them rely on debt and credit cards to meet various unexpected expenses. In fact, if you have an emergency fund, you no longer need to owe it to meet various emergent emergency needs.
The ideal amount of emergency funds is 6 times the cost of living you spend each month.
5. Discover how to add money to pay off debt
If you are currently in a state of debt that has accumulated, then prioritize spending to pay off debt immediately. There are so many ways you can do to add money every month. For example, you stop subscribing to cable TV that is rarely used, preferring to exercise at home rather than at the gym, or you can also sell various items that are no longer needed. The more costs that can be removed, the greater the amount of money you can use to pay off debts now. The more money you set aside to pay off debt, the faster you will be free from debt bondage.
When you are free from debt bondage, then it’s time to improve spending patterns for a better future. You can set aside a portion of your income to invest in various investment instruments. CoinDoes can be one instrument that can be chosen because of its ability to provide returns starting from 18% in a year. You also do not need to spend a lot of money to invest in Koin Works, because enough with a minimum fund of Rp 100,000 and multiple, investment can be done.
6. Have Financial Priorities in the Future
If you have escaped debt bondage, this is the time to have priorities and financial goals for the future. Start preparing funds for children’s education funds, paying off homes, renovation fees, and so forth. Not only that, you also have to start saving income to prepare emergency funds. As we explained earlier, prepare an emergency fund at least 6 times your monthly living expenses.
Do the Above with Discipline
Get out of debt bondage and start getting used to saving and investing must be based on the willingness and discipline to live it. Do the 6 points that we have stated above gradually and continuously. It takes a sacrifice and hard work to get out of debt bondage.
What’s more important is that after you get out of debt bondage, start prioritizing various financial goals for the future. Investment is one solution you can do to prepare for a better financial future.