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Economic indicators

You are in the red? See 5 steps to pay off your debts

07.12.2015

This article was translated by an automatic translation system, and was therefore not reviewed by people.

 

 

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 A financial control application GuiaBolso research shows that 35.5% of users have paid interest for use of overdraft. Although the number is less than that recorded in September, it is 5% higher than seen in March, when the survey began to be made.

Overdraft interest is one of the highest in the market, coming to 263.7% per year --the of payroll loans, for example, charges 27.6% per year, according to data from the Central Bank of September. The only one who can have greater interest is the revolving credit card, which already exceed 414% annually.

"For anyone who is hung on the overdraft, the first step is to exchange the debt for another cheaper, ie covering lower interest rates. There are different types of personal loans and all are more advantageous than the overdraft," explains Thiago Alvarez , founding partner of GuiaBolso.

Once you made the payment of expensive debt, it's time to save approximately 15% of the salary to pay off the new loan.

So that you are not the next, check out five tips Pocket Guide to exit the red:

1. Know where your money goes

Identify the excesses are is the first step. Separate whom are spending on credit and debit cards, and which are made in cash and then organize all your expenses into categories - such as supermarket, transport, leisure, etc. This makes it easy to identify what are the expenses that are not essential and can be eliminated.

2. Work on a plan of action

After identifying what you can stop spending, create a plan that sets a spending limit for each category - and, more importantly, stick to them. Something that can help is to let the side of credit cards and do not make more use of special or rotary check. Always give priority to debit cards, prepaid or cash.

3. List your debts by priority

Priority should be established based on the interest rate, low, and importance. Thus, they have higher interest rates and are most urgent will be the first settled.

4. Look for extra income

If even reducing your spending and doing the steps above you can not get out of the red, try to have an extra income to help settle debts faster. There are several ways to have extra money in the budget, just depends on your dedication, time and willpower.

5. Change your spending habits

Pay off old debts and continue spending the same previous ratio - that led you to resort to overdraft - is not something that will relieve you of the interest. A key step in not join the red is the financial rehabilitation.

The 50-15-35 rule is a good one: your essential expenses should not exceed 50% of their income; 15% of the budget should be allocated to Priorities Financial - investment and payment of debts; 35% must be used for expenses such as entertainment, travel, etc.

 

Source: Uol

 

To access the UOL site, click here.

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This article was translated by an automatic translation system, and was therefore not reviewed by people.

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