Many people dream of raising money to make an investment, make a big wish or simply have a security reserve. However, to achieve this goal, the number of actions must be taken.
If you want to know what you should do to pay off debt and start investing, this post is for you. Read on and check out our complete guide!
If you are in arrears with banks, stores and financial institutions, you have to do everything possible to avoid the interest rates that are too high. So call the manager and find out what can be done.
By demonstrating an interest in paying off their debts, most banks and companies can offer lower interest repayment. This is because it is more advantageous for them to receive a slightly lower amount than to start an expensive and lengthy court process.
Regardless of whether or not you can renegotiate all debts , you should start paying off those with a higher interest rate.
From then on, you will do a financial re-education, which will include cutting out a lot of superfluous spending and reducing other expenses. All of this will be necessary to achieve your goal. But to stay motivated, you need to create goals.
For example, determine that by the end of the year you will have saved 3 thousand dollars. Or that next year, you will save another 5,000 dollars. This type of goal is intended to entice you and your family to save enough money.
Also, when you get upset about not being able to spend on something, keep these goals in mind so as not to give up on the main goal.
Identify Where to Cut Spending
You must spend at least one month taking note of all your expenses before you can review them and define which ones are superfluous. It is always possible to eliminate small habits that ultimately consumes a lot of money, such as having coffee in the bakery, having lunch out often, among others.
If you want to save enough money, you can take greater actions such as moving to a place where the rent is cheaper, swap the car for a more economical model, opt for plans cheaper internet, TV and mobile phone and so on.
It’s important to keep in mind that you don’t have to live in bad conditions to save money, you just need discipline and make small sacrifices – that don’t drastically reduce your comfort.
Have a plan
To pay off debt and start investing, you need a lot of organization. Therefore, note:
- all debts you have;
- your monthly fixed expenses;
- scheduled expenses (preventive car maintenance, purchase of school supplies, for example);
- your monthly earnings;
- he money you saved by cutting superfluous.
You can use a spreadsheet or financial control application to keep this information up to date. From there, start tracking your progress monthly.
If your monthly income is much lower than your debt and expenses, consider supplementing your income by providing some kind of service that you can easily do. You can sell homemade sweets, resell cosmetics, work as a driver through apps, for example.
Do more things at home
A good way to save money is by doing things at home. For example, cooking more often and taking a lunch box to work, or washing one’s own car instead of paying for it.
Choose to cook more often at home, even when you want special food – in the end you’ll save more than if you went to a restaurant.
Ordering delivery instead of going out for dinner is also more economical as it avoids having to pay parking, gas and service charge.
In addition, leisure activities can be done at home. If you live in a condominium, make use of the common areas such as pool and barbecue. If you live in a home, enjoy the space to welcome friends and family.
Use streaming services to watch family shows and movies for a set fee, much cheaper than going to the movies.
When you aim to save money, you need to talk to your family and friends so they understand the situation and collaborate. It is important to explain to children that some spending restrictions are important for a better future.
Your friends should be aware that you won’t be able to go out with them as often as you need to save money. Maybe they can also be motivated to save money or share tips with you.
By talking about this situation to the people you live with, they can help you think of new ways to save. In addition, they will be more understanding when you cannot attend a social event.
No need to stop meeting the people you care about, just find more economical ways to do that – meeting at someone’s home instead of going to a bar, for example.
Installment purchases are debts you make with uncertain future money. Therefore, avoid making installment purchases as much as possible, and if necessary, install it in a few times.
It’s challenging, but ideally you have the following mindset: If you don’t have the money yet, you shouldn’t spend it. It also means avoiding your credit card and centralizing your purchases on a single debit card for more control.
Make an investment
Applying your money is a good way to know that it will be safe. A good option is to invest in a consortium, as in addition to using your money in a smart and disciplined manner, you will still have one at the end of the pay period.