Go to HELL you Mr DEBT!!!
As a young married couple with RM20,000 Debt, how could we overcome it!!!
Let’s focus on this 2 simple steps (Beginner)
1. Stop engaging with new loan.
2. Set up an emergency fund.
STOP ENGAGING NEW LOAN
The reason why our debt kept increasing is because you keep adding to it. Stop using credit. Don’t finance anything. Cut up your credit cards. (remember, you’ve caught in this problem, stop comparing with others)
That last one can be tough. Don’t make excuses. I don’t care that other personal finance sites say that you shouldn’t cut them up. Destroy them. Stop rationalizing that you need them.
• You don’t need credit cards for a safety net, for convenience or even for cash-back bonuses, it’s killing you
• You don’t need credit cards at all. If you’re in debt, credit cards are a trap. They only put you deeper in debt. Later, when your debts are gone and your finances are under control, maybe then you can get one
• After you destroy your cards, STOP any recurring payments. If you have a gym membership, cancel it. If you automatically renew games account, fashion magazines etc…cancel it. Cancel anything that automatically charges your credit card. STOP using credit.
Once you’ve done this, call each credit card company in turn. Do not cancel your credit cards (except for those with a zero balance). Instead, ask for a better deal, whether you get a better interest rate or not is another issue. It never hurts to ask. I know I;ve done it many years back!
ESTABLISH AN EMERGENCY FUNDS
(It’ll takes month on this method)
Why save before paying off debt? Because if you don’t save first, you’re not going to be able to cope with unexpected expenses. Do not tell yourself that you can keep a credit card for emergencies. Destroy your credit cards; save cash for emergencies.
How much should you save? Ideally, you’d save RM300 to start, on come on…you cigarrete or lipstip cost more than that in a month, ok RM100 then! this money is for emergencies only. It is not for Shirt. It is not for shoes. Not even for Playstation 3. It is to be used when your car dies, or perhaps someone dies…
Approaches to Debt Elimination.
1. Order your debts from lowest balance to highest balance.
2. Designate a certain amount of money to pay toward debts each month.
3. Pay the minimum payment on all debts except for the one with the lowest balance.
4. Throw every other penny at the debt with the lowest balance.
5. When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next-lowest balance.
The most important thing is to start now. Don’t start tomorrow. Don’t start next week. Start tackling your debt now. Your older self will thank you.