While generally debt can be a good thing, because it helps with getting that dream house, or car, or vacation, or gets your kids to college, excessive debt is something best to avoid. Excessive debt usually leads to problems such as unexpected costs that come up and you’re not able to deal with; you run out of money fast; brings you only stress, grief and depression.
There are several ways to reduce personal debt, and here are 3 top ways to do that:
1. Reduce your credit card interest payment – if your interest rates are too high, switch to a credit card with less interest. Also put some of your bills on standing order, so they are automatically paid, no matter whether the bills are lost in the mail, or you forgot to pay them, etc.
2. Find lower rates on house and car insurance – there are plenty of places to shop around online websites like Sastidunia, eBay, Flipkert which gives great coupon deals to save money. Sometimes you get discount if you use the same company for both your car and your home insurance. Use that to your advantage. In some countries if you are above the age of 55 and you are retired, you can get a discount up to 10%. You just need to ask, as not all companies will disclose this information freely.
3. Reduce your variable expenses – there are two types of expenses: fixed and variable. Fixed expenses are those necessary ones that cannot be eliminated, such as mortgage, car loans, etc. Variables are those that you can touch and reduce: food, clothing, entertainment, utilities, and vacations. Do you see here at least 2 areas that can be be used to reduce expenses from?
Your goal in doing these steps is to reduce your level of debt, to avoid bankruptcy, credit counseling services and possibly debt collection agencies. You don’t want to go down that road!
In some cases, expensive assets that are not needed should be sold. Expensive houses and cars could be liquidated to pay off debt and less expensive housing and transportation used.
Ron