There are many methods to pay off debts quickly, but each requires wit and discipline. Because the desire to pay off debts quickly, without having the ability to do so, borders on the desire to “cut down” money quickly and easily.
So, you can’t pay off a big loan, mortgage, or credit card in a day, week, or month unless you win the lottery. And the lottery, as you note, is won by a few.
Just like you can’t make a million from scratch in one day if you don’t have that kind of experience.
By the way, it’s experience, not knowledge. After all, people are often looking for some super idea for investment, which quickly and without effort will bring a lot of money. Remember, ideas and information are worth almost nothing in almost all cases.
Every loan, mortgage or credit card situation needs to be handled individually and according to the current economic situation. The general approaches are discussed in this article.
There are two approaches to paying back loans and credit cards: saving money or cutting down on debt. You can try to pay off your credit early, to increase your payments so you can pay less interest on your loan, or you can do the opposite.
Yes, yes, don’t be surprised, lower payments are also an option. And not in order to take out a new loan. And not in order to get a new loan, but in order to get your head up, breathe easier, and get on with your life. This is a Western approach, taken from a book by Robert Kiosaki, which we told you about. It’s a good basic book to start working on your money. But back to debt.
We at our school take a common sense approach to personal finance. We’re not fans of severe savings, and we don’t advocate closing loans quickly and urgently, especially if you can’t buy anything for yourself afterwards and have to be on a financial diet for months.
Why do we believe that you should not rush with the payment of loans (provided that you do not suddenly get rich or the loan is not taken at a predatory rate several times higher than the rate of the Central Bank).
There is such a thing as room to turn around. If you’re taking out a loan whose payments take up most of your income, think about whether you’ve considered all the possible things that could happen to you. Are you covered for normal nutrition, health maintenance, and most importantly, unforeseen expenses.
Just don’t assume that there won’t be any unexpected expenses. Just look at previous years and figure out how much you need to hold on to so that unexpected expenses aren’t unexpected at all. And if there are no such expenses, you can invest that amount profitably at the end of the year, and set aside a new one.
We’ve already talked about the analogy of finances and workouts, and large loan payments are personally reminiscent of a strict diet and a tough workout. A person can’t be on a peak all the time and it has been scientifically proven that people on strict diets are times more likely to crash than those who choose to eat right and exercise adequately.
It’s the same with finances. If you put a big debt load on yourself and even try to pay off this loan in advance, you can quickly fall off, because you are not prepared for such a load.