At least that's how we and many others feel too. You too?
You know the situation, the beginning of the month was just a few days ago, but your bank account would need the next paycheck best already. The credit card is maxed out, possibly also the second. Often the accumulated debts are consumer debts.
One does not treat oneself to anything else and would like to reward oneself for all the hard work. The classic, debts on the current account, the overdraft with a nasty interest rate, as well as the maxed out limit on the credit card are at some point a permanent condition. The quick installment loan for the new car, PayPal pay later and much more tempt us and get you into the debt trap. Sometimes also debts with friends or family. Out of charm you do not dare to talk to them anymore and even become lonely. Because nothing is possible anymore, the situation seems to be impassable. One reminder after the other flutters into the house. Often you are downright desperate. We know people who have taken their own lives because of their debts. But you are not alone, we will help you! The good news is, there is a plan to reduce debt.
But first completely from the beginning, how do debts arise?
They arise when the expenses are in an unfavorable ratio to the income. Spend more than you earn.
This is how you proceed:
- Take stock
Use an Excel spreadsheet to record all income and expenses. You can request our special max salary table from us. - Get an overview
It is mega important to keep an eye on everything. If you have several accounts, list them. Everything must be on the table, even if it hurts! - Keep a budget book
At the risk of sounding old school, it's important to keep track of where your money goes and how much is spent on what. There are several apps and tools that can help you do this. But it's no use having the best tool if it's not used ;-). The important thing is to do it NOW!
All written down, what now?
There are two possibilities at this point. First, reduce expenses. Second, increase your income. We've put together some ideas for you on how to get more income.
Please have a look at them. Maybe there is something for you. You can also combine both. This is how I got out of debt. Increase income and reduce expenses. This will make it even faster I promise!
Eyes closed and through?
Not here, do not close your eyes to your debts. Look at what has brought you into this situation and what you need to avoid.
Effectively reduce expenses
Here are some of the ways we think are the most effective in reducing expenses.
- Avoid overdue fines
Pay your bills on time and don't take out a new loan for it. - Reconsider your purchase decision
Before you buy something, think about whether you really need it and how long the purchase decision will make you happy. Most "happy-maker" decisions don't last long and the next "happy-maker" has to be found, which starts a new vicious circle. - Reduce cost of living
50-75% of income goes to living expenses. This article might interest you. Start comparing your providers to save extra here. We are sure that you will get a few nice euros. - Frugalism, the radical way!
Through frugalism, you can quickly achieve financial independence by saving radically, but also by investing with foresight. - Installment loan
If you have built up debts in several places, it makes sense to pay off the overdraft, the debts on the credit card and other debts by means of an installment loan. Here you have a much lower interest rate in the best case and only one item to pay off each month. So you keep everything better in the overview and see the mountain melt faster, as if many small mountains must be dismantled. Click here to compare – installment loan*. - *Link to our advertising partner Credimaxx
- Practical tips for everyday life
Prepare your food at home and take it with you, even the coffee to go! Going to the bakery costs a lot of money.
A small calculation example: 2 times a week to the bakery for about 5 € something small buy (z. B. Latte Macchiato and a croissant) are 40 € a month and about 500€ a year! - Cash is real!
My grandfather used to say. There is a lot of truth in it! So you feel better when the wallet is empty. With the EC card you do not see with the swipe, how much is still left. - The envelope method
Keep track of what you need and how much money you need each month through your budget book. Pay all expenses that are not booked by standing order or direct debit from your account in cash! This is how you train your feeling for money and see how much you have available for what in the month. For example, take 4 envelopes and write on them: food & hygiene, fuel, leisure, clothing. Adapt the envelopes to your needs. - Unscheduled repayment
If there is anything left over at the end of the month, take that money and make a special repayment. How to get financial freedom faster.
In sum, all this serves you to get where you want to go. Become debt free. Now that all debts have been paid off, wouldn't it be great to be able to move on to financial freedom? At this point our recommendation to look at the topics of other sources of income and investing. It's not just the here and now that matters, it's how you're set up financially in the future. Because no one but YOU should care about your finances!