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Apr 2, 2015

Tips for Getting Your Family Out of Debt

Take Stock of Your Assets

Sometimes, a lot of your money is locked up not in the bank or under your bed but perhaps it IS your bed. By that I mean you may have bought furniture like beds, or flat screen TVs or consumer electronics that you may not be using as much. Don’t be reluctant to sell off appliances you don’t need and don’t think of it as a desperate move to get more cash to pay down your debt. Think of it as a de-cluttering exercise that lets you earn money—money that you can use to pay down your debt. 

Much has been said about minimalist or frugal living these days. It might be a good idea for you to jump in on the bandwagon and cut down on the number of things that you own. If you sell your game console for example, you don’t have to spend on games anymore!

Savings vs. Debt Payment

If faced with a choice to put money towards savings or to pay down debt, choose to pay down debt. Why? Because the interest rate on your debt will undoubtedly be higher than the interest you can earn from your savings. 

Compare financial products online and see for yourself how loan interest rates are usually higher than the interest you earn on your savings account. Prioritize debt payment and start rebuilding your savings instead once you’ve eliminated your debts.

Be Relentlessly Thrifty

Pinoys are fond of “sidelines” or raket and that’s good. When faced with debt, earning a little more with the help of a side job can go a long way. But not everyone has the time or the skillset to take on another job and what do you do in this case? 

Be relentlessly kuripot. It may take some practice to be a little more frugal if you grew up without thinking twice about buying something at the mall, but if you stick to your plan, you’ll eventually get the hang of it. Even grownups can fail to differentiate between wants and needs. To be kuripot means knowing the difference of these two and finding ways to save up for your wants.

Don’t be disheartened if you and your family are struggling with debt. There are ways to get out of it and being more mindful of your expenses is one. Taking a strategic plan to tackle debt through the snowball method or by talking to debtors are some other the ways to get out of debt. 

It might take a lot of sacrifice but when you finally make the final instalment and realize you have more money in your hands to spend on things you want, you’re going to realize it’s all worth it. Know of other ways to get out of debt? Share it in the comments below!

This post is brought to you by:
MoneyMax.ph is the Philippines’ leading financial comparison site where you can save money by comparing financial and car insurance products and services – fast, comprehensive, and free. We aim to give the power of smart purchase decisions back to Filipino consumers by providing everything they need to become financially savvy. 
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