Overdue electricity bills, credit card debts and overdue bills are some of the avenues for the indebtedness that became a more serious problem during the covid-19 pandemic. For some people the feeling is like a snowball, but according to specialists consulted by Agência Brasil, with organization, planning and a little sacrifice, it is possible to get out of the red. According to the financial educator, Jhon Wine, vice president of the Brazilian Association of Financial Educators (Abefin), some steps are important to rebalance the accounts:
1 – Expense sheet
To keep track of the accounts, he recommends starting by writing down all expenses, from coffee to car payment, for a period of 30 days. That way, Wine says it’s possible to know exactly where the money is going.
2 – Have dreams established
One of the goals for 2022 of those in the red may be to get out of debt by the end of the year. With this motivation in mind, it is important to choose priority debts and create strategies, such as paying bills with more cash discounts, such as IPTU. Furthermore, he suggests having motivation and creating dreams to be achieved in the short, medium and long term. “Include pleasure in your planning, otherwise you’ll get tired and end up running away from the plan. But everything has to fit your budget”, recalls Jhon Wine.
3 – Organized budget
Organizing the budget is another recommendation to balance the bills and get out of the red. There are now several free apps available for this purpose. Those who prefer can also use a spreadsheet on the computer or a paper notebook. The important thing is to write down all the money you receive in the month and divide up all expenses such as food, health, leisure, telephone, among others.
4 – Involve the family
Involving the whole family in organizing the budget and in the process of ending debt is considered a key point by the consultant. Every member of your household can help with ideas to lower the bills or make more money, with extra work or selling non-essential items that are unused.
5 – Unnecessary expenses
The lifestyle and needs of each family will indicate what expenses can be cut. While you are in debt you will need to tighten your belt and cut some spending for a while. Small changes in habits, such as turning off the light in the bedroom when you go out, turning the shower to summer in the heat period, and gathering clothes to use the washing machine at full capacity can make a difference at the end of the month.
In addition to these steps, Serasa Experian adds that looking for extra income can be interesting. According to the institution, sometimes just cutting is not enough, or even with all the possible cuts, there is still a lack of money to get rid of debts. If that’s your situation, the route may be extra income. It can be with a job in the hours that were free, breaks on weekends or even with sales.
With your budget in order and with the savings from spending cuts or extra income, looking for lenders is also a must. According to Serasa Experian, with cash in hand it is easier to negotiate and get a discount. For those who have more than one debt, the important thing is to give priority to those with the highest interest so as not to snowball.
Another recommendation of the institution is to research before buying. That’s the only guarantee that you’ll find the best price and, of course, save. The last tip to get out of debt is a self-assessment. Stopping and thinking about what happened to reach the debt situation are important steps to avoid default in the future and know how to get out of the problem as soon as possible.