Do you how many people are in debt right now? And, I am truly sure that you have a friend, or a family member, who is struggling to death with debt. The problem is that we all hate debt, and hate getting loans, but we find ourselves in the need, or the obligation to have a loan.
Whether this is a car loan, or an apartment loan or even school’s loan. You must get out of this debt, in order to develop your life, and build more opportunities to succeed. So, we will try to give you the best 5 innovative ways to pay your debt today and start a happy life.
The idea is that it is going to be too hard, to start developing your life but you have something that keeps you down and keeps drugging you to the bottom. Especially with the high interests’ rates of loans, and all countries are having the same thing, and banks are making millions of dollars from your pockets, by taking loans.
- Find the root causes:
The first step that you must so is to ask yourself why you are in debt in the first place, maybe the answer will be that you had to take these loans. But, the real answer is that you needed quick money, and you thought that you will be able to pay it in the future when you have more money, but keep in mind that you can make more money if you don’t take that loan.
Eric Ries from the book the Lean Startup explains the 5 whys methods, that will allow you to find the root causes of any complex problem or issue. By asking yourself 5 whys or more, you can start asking yourself why you have this loan and keep asking more whys questions, until you find the root and the real cause of taking this loan in the first place.
For example, let’s say that you have a credit card loan. So, you will start asking yourself why did use your credit card, the answer will be because you didn’t have any cash in my emergency fund of course, then why didn’t have any cash in your emergency fund, the answer is that you didn’t save money for example. You can keep asking yourself more questions, for example why you didn’t save any money, because you weren’t discipline and no one showed you how…etc.
So, the 5 whys method can be effective to find the root causes of any complex issue that you have, and there are too many creative ways to discover these root causes, you can google them and find the easiest way for you, if you didn’t love the 5 whys methods.
- Manage Your Cash Flow:
If you want to get out of debt, it is too important that you manage well you cash flow or the cash money. And, you must know what you have coming each month, how much is your income and the amount of expenses. Because, a lot of people have a job that pays very well, but they have no clue where their money is going to, and where they spend their money.
Because the idea is to know the budget, that you will need for every single month, or even the year budget if you are the owner of a company. The budget will allow you to know the exact amount that you need, in order to pay your expenses and save a little money every month. These saving will allow you to get out of debt and pay it easily, so the idea is that you need to know the exact budget that you need to cover your expenses, and then you can know it your income is enough or not.
- Stop being blind:
The problem of the most people, is that they are acting blind toward their loans. So, to get out of this situation and pay out your debt, you must know that it exists there. And, don’t act as you are feeling good and forget about the loans’ problems.
Also, a big problem is that most people don’t even know what their credit score is, and what is the credit score history. So, our advice is to check annualcreditreport.com, and check what is going in with your credit score.
Another thing is that you must figure out how much debt you, and how much interests are there. The problem is that a lot of people don’t care about how much debt they must pay, until they receive a notice and they will be surprised.
Especially in consumer debts, and credit cards loans, most people don’t put attention on the total amount of the debt. So, they will keep paying a debt with no purpose and no objective to pay the total of this debt. Keep in mind, that the bank is not a prophet and they are making mistakes all the time, and they can steel your money if you don’t pay attention.
So, step three is that you must know so much information about your debt, how much you need to pay and what are the interests’ rates…etc. Because, it is going to be followed with other steps and you must know this information to keep following the process.
- Celebrate your small wins:
The idea of this step is that the process of paying a debt can be too long, if you have a lot of debt. So, by celebrating the small wins, you motivate yourself to keep paying more debt and saving more money to get out of this debt.
This small can be for example, adding $500 to your saving account, pay 5% of the debt, making a double payment on a high interest credit card…etc. Enjoy doing these small wins and consider every small step as a win, because it will keep you motivated to pay more debt and make more efforts. You can go for a movie, take your family out for a dinner or even visit your parents and celebrate with them. The idea is that you need to keep being motivated and feel that you are too close to the end of this process.
- Stay Focus:
The final step is too important because you have to make a conclusion, starting with the root causes of having a debt. Do you remember the 5 whys that we spoke about in this article, so you must write them down and try to change the maximum issues and identify the actions that you need to do.
The idea is that you must stay focused and keep tracking the debt and the achievements that you are making. And, celebrate every small win that you make in the process of paying out your debt. In addition, you must believe that having a debt is not something good, and it is not a luxury because it will keep drugging you down and stop you from doing too many great things in your life.