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Manage your debt

Admit you are in debt and start living like it –

Did you know that most millionaires live in modest homes and drive used cars? That’s why they are rich. Don’t expect to eat out at fine restaurants. If you can’t afford it, get over it. You will be able to go someday soon but not now. Don’t buy new clothes for a while. There is nothing wrong with what you already own. Saving that money for a few months will help get you back on your feet.

Admit you are in debt and start living like it
Total up your debt –

Go ahead and face the music. You need to open all those unopened bills. Make a list of all your debt, big and small.

Total up your debt
Pay with cash or with Debit Cards –

This will help you control your debt.

Talk to your creditors –

Don’t ignore them as they won’t ignore you. If you keep in contact with them, they will be more willing to work out a plan with you. Be honest and pleasant, no one wants to help you if you’re nasty.

Make a plan for which debts to pay first –

You must pay everyone something every month even if it’s only a thousand rupees, but you need to have one debt that you are going to get rid of first. Target the one(s) with the highest interest rate, which is called “laddering”. Also, call them and ask them to reduce your interest rate if possible.

Roll over the savings –

Once you have one debt paid, apply that money to the next debt you are trying to pay off and just keep going. This is an integral part of the “Reverse Laddering” method mentioned above.

Change your way of thinking –

Instead of saying that something only costs a hundred rupees, think of it as keeping that Rs.100 instead. That savings will grow interest for you. So that item doesn’t really just cost a hundred rupees it costs you your future!

Save for a rainy day –

Try to put away 10% of what you make into savings. If you can’t do that then put away whatever you can; even if it’s Rs.500 a month. Make this the first thing you do each month/week.



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