There are two dangers in eliminating debt. The first appears when a person takes on new debts to pay off old loans. The debt hole does not decrease, and the strength and motivation becomes less. The second danger is associated with the fact that a person works and does not see the return on his efforts. Debts are diminishing, but savings are not taking place. When all debts are paid off, a person is left empty-handed. Therefore, the feeling of instability does not go away and self-confidence collapses. To avoid these dangers, we will use the advice of Bodo Schaefer, which he describes in the book "The Path to Financial Independence."
Instructions
Step 1
List what beliefs led you to be in debt. Inner beliefs guide our actions. Analyze where the debt came from and what you thought was right then.
Step 2
Write down how you change these beliefs. They need to be changed so as not to incur new debts. Define other rules of the game that you will adhere to unswervingly.
Step 3
List your fixed costs. You need to have a clear idea of how much money will have to be paid monthly. Now we do not take into account debts. Just fixed running costs. To prevent debts from accumulating, these amounts must be paid from each receipt of money. Write down your rent, transportation, food, and other living expenses. Be clear about the boundaries that you will not cross.
Step 4
Get the money back from the debtors. Remember who keeps you on your toes. Meet and talk seriously. Set a specific deadline. Get periodic installments.
Step 5
Talk to creditors. Go towards difficulties. These conversations can be unpleasant. But people will see that you are not shunning your commitments. Be honest that you can give in parts.
Step 6
Follow the 50/50 rule. Pay out the amount calculated in step 3 from each salary. Then divide the remaining money into 2 parts. Use one of them to pay off debts. The second - save. This will allow you to simultaneously free yourself from debt and feel confident in the future due to the growth of savings.
Step 7
Raise the bar higher. Demand more income from yourself. Look for new opportunities. Develop skills. Do this as quickly as you can.
