Here Is How To Get Out of Financial Debt

By Soko Directory Team / Published January 26, 2022 | 10:34 am




KEY POINTS

Determination will be needed to become debt-free, and once that happens, the end of the cycle is near. At that time, words like debt relief, debt services, and debt solutions, will not need to be in the vocabulary - except to tell others that becoming debt-free is possible.


Debt SGR

KEY TAKEAWAYS


Without a budget that is practical and accurate, there really is almost no way to prevent the monster of debt from rising up as a threat again.


Being in debt is never fun. Although many people tolerate it for a long time, at some point it often becomes intolerable – and then people start looking around for a solution.

Of course, quick solutions are difficult to come by when money is tight, and lenders may not provide the consolidation loans needed at that time. The good news is that there are other ways that may work just as well – possibly even better. Here are five powerful steps to get out of debt.

Determine to Become Debt Free

In order for a debt solution to last, some extra steps will need to be added to the steps taken to actually reduce debt, and then remove it. The truth is that many people, who do get debt loans, often end up back in debt again before long.

It is important to make a goal to seek to stop that cycle of debt. Otherwise, the same problems with creditors and tight finances will return. It is a far better solution than mere debt management to determine to simply stay out of debt in the first place.

Determination will be needed to become debt-free, and once that happens, the end of the cycle is near. At that time, words like debt relief, debt services, and debt solutions, will not need to be in the vocabulary – except to tell others that becoming debt-free is possible.

Establish a Budget for Better Money Management

This is the real key to efficient money management. Budgeting can help find money going down the drain and it can also create ways to save money, too.

Without a budget that is practical and accurate, there really is almost no way to prevent the monster of debt from rising up as a threat again. Developing and regularly tweaking a household budget will provide the essential tools for financial victory in the future.

Expose and Eliminate Sources of Unnecessary Waste

Most households have several ways that money is being robbed from their pockets including playing online casinos in Kenya, Malaysia, Singapore, and a couple of more gambling countries. When finances become tight, this often means that by careful watching and accounting of the household money on a regular basis, ways can be found to create a larger cash flow to reduce debt.

More money can be turned loose toward reducing debt by eliminating some of those extras that are not needed. Things like eating lunch out every day, a daily latte, cigarettes, the best satellite programming for the TV, fastest Internet speeds, etc., are all things that could be removed or reduced in order to put more money down toward paying off debt.

Start Working Seriously Toward Debt Elimination

Once those sources are identified that are consuming the extra money, the money can then be diverted toward the elimination of those debts. The minimum always needs to be paid on each bill, and whatever additional money can be paid each month should be applied as well.

A great way to free up more money faster is to apply extra money toward the smallest bill, and pay it off first. This will enable more money to go toward other bills. Also, be sure to pay the bills on time, so that late charges are not incurred.

Discover Best Places to Save Money

Preventing debt in the future is a good reason to have a savings account of some kind. Be sure to investigate ways to save and find out what the best fees and interest rates are in the community. This will build up the account faster.

Although these steps may seem rather simple, each one is powerful and will enable people to get out of debt – and stay out. People who are tired of debt can do something about it – but the steps need to start today to enable that better future.

Basic Monthly Budget – Household Expenses List

Budgeting for household expenses is not a simple task, and every family incurs different expenses, which makes the process even more difficult to standardize.

Learn about a list of household expense allocations and find out where to download a free Microsoft Excel monthly budgeting spreadsheet template.

Basic Monthly Budget

The relevant website attempts to make the budgeting process simple by providing an online budgeting calculator that suggests percentage allocations for major household expense categories. Users must simply input a household’s gross income, giving levels, and tax burden. Note: Anyone who does not tithe can simply enter zero in that box.

List of Household Expenses – Standard Family Budgeting Example

Below is the calculator’s list of household expense categories and suggested standard budget percentages for $45,000 annual gross income with a $7,000 tax bill.

  • Housing: 36%

  • Food: 12%

  • Auto: 12%

  • Insurance: 5%

  • Debt: 5%

Entertainment / Recreation: 6%

  • Clothing: 5%

  • Savings: 5%

  • Medical / Dental: 4%

  • Miscellaneous: 5%

  • Investments: 5%

 

Amounts Will Vary from Standard Monthly Budget Example

Based on this income scenario, the site indicates that 6% should go toward child care or school expenses if the household has children in school or daycare. Since the percentages above add up to 100%, a household with children should reduce another category or combination of categories by 6% total to allow for child care.

How Lower-Income & Higher Income Household Monthly Expenses May Differ

Households with substantially lower or higher incomes than the $45,000 indicated in the scenario above will need to adjust percentages accordingly. There are minimum cost levels in each category, and no matter how low an income goes, that minimum level will remain essentially the same.

A lower-income household may pay a larger percentage of income toward housing, food, auto, insurance, and medical bills; the same household may not have enough money left over at the end of the month to invest. Conversely, a much higher income household may have more than 5% available for investing or may spend more money on recreation and miscellaneous expenditures.

Free Microsoft Excel Budget Worksheet Templates

Some individuals may find it easier to start with a pre-populated personal budgeting spreadsheet template instead of analyzing hypothetical monthly expense percentages.




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2022
  • January 2022 (294)
  • February 2022 (329)
  • March 2022 (361)
  • April 2022 (294)
  • May 2022 (206)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (273)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (250)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (250)
  • July 2019 (337)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950