Unmanageable Debt? Don't Sweat!
Your coffee tastes horrible today. Your car too seemed to be making peculiar sounds. And while your colleagues can’t get enough of the beautiful weather outside, you nod your head distastefully, wondering what the big deal is. The symptoms all point in one direction – the freshly heaped monthly bills on your table!
Managing debt is fast becoming an urban catastrophe which is ailing individuals, corporates and governments alike. India's external debt rose 6.6 % in March 2015 to $475.8 billion, while Credit Suisse reported that the debt levels of India's top companies like Reliance ADA, Vedanta Resources, Essar Group, Adani Group, Jaypee Group etc. has shot up to 15%. Before you spiral into self-pity, assuring yourself that you never really stood a chance in the face of global instability, consider the fact that unlike the above examples, your individual situation can be rectified with the help and effort of just one person alone – you. The following checklist which can make your monthly financial woes disappear.
Figure out your financials
Collating your bills, EMIs and monthly expenses to get an idea of how much you are spending will help you compare the figure with your income. If you are overshooting on a regular basis, then you are setting yourself up for a sure loss. Many financial sites offer online budget planners which offer smart tips and bill payment reminders while reflecting your outgoing/incoming moneys in easy to understand and remember visual representation tools.
Control your expenses
Hunt for the best deals It always pays to do a little research for discount options from multiple sources before buying any product. With the growth of ecommerce and online shopping, there is no dearth of sellers that are giving high discounts to lure customers.
Look for alternatives You might save a bunch of money if you can find a decent alternative to buying a brand new product. Barter of goods or exchanges with friends can substantially brighten up your month-end financial situation.
Identify and attack your biggest expenses A visual representation of your monthly spending habits can be used to identify your regular big ticket items. Have an honest talk with yourself and make some ruthless cuts in avoidable areas like the designer jeans or high-end shoes which bulk up your credit card bills.
Curtail routine expenses Is it possible to carpool to work? Could you substitute the weekly clubbing and restaurant outings to alternate weekends? Miscellaneous expenses like petrol and entertainment are very often ignored, but are capable of adding up to a big number.
Say no to impulsive shopping We live in a world where we are perpetually surrounded by materialistic attractions. It is easy to fall in the honey trap and waste money on things we don't really need. Make a strict mental note to avoid these unnecessary and impulsive purchases.
Analyze and organize your debt
Not all debts are equal. Identify the villainous debts which are accruing the highest interest and tackle them first to save yourself from an unrecoverable situation. A good understanding of how much interest you pay in various forms of debt like loan EMIs, credit card bills, late payment of mobile bills, etc. can help avoid the most expensive debts. For instance, it might make financial sense to pay off a large outstanding credit card debt by taking a personal loan from the bank.
Ask For Directions
If your personal commitments are making it difficult to spend the time required to work out a good debt management system, then talking to a reliable financial advisor can be useful in chalking up a good plan, while also giving you insights into your current spending and investments. Some online financial advisory products can also be extremely efficient, providing you with custom-made solutions and detailed instructions to invest smartly and earn profitably.
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Invest today for a debt-free tomorrow
And finally, it is always better to stay one step ahead when it comes to financial planning. If you are currently debt-free and manage to save a part of your income, then you must put those savings to work and transform them into a second source of income. Not only will that ensure a more stable financial future for you and your family, it will help you achieve financial independence faster!
If you wish be get out of the rat race and be the one who went from being debt-ridden to a smart investor, then start planning now! Gain the respect of family, friends and colleagues alike by investing effortlessly and get back control your own life.