Find out how you can get out of debt

Have financial education It is understandable that debts are very common for most people and are not negative by default, but they become a complicated aspect when they are mismanaged, i.e. when one gets into over-indebtedness.

In simple terms, debt is when an obligation is obtained to return or pay money to a person or financial entity (such as a bank) within a certain period. A simple element not to be afraid of, but to be handled responsibly.

Be careful! They can foreclose on you for these debts

Personal finance and debt levels

According to the Association of Banks of Mexico, the level of debt is acceptable between 30% and 40% of available moneyafter you cover your family’s primary expenses, because it means you don’t have to set aside basic household services, pantry and food to meet your financial obligations, in this case paying off debts.

Exceeding these levels means falling over-indebtednesswhich should be avoided.

Condusef proposes to limit the debts of Mexicans by law

Financial education steps to end debt

This is why it is recommended to follow some strategies to maintain the sustainable level of debt that you achieve healthy personal finances and maintain family well-being.

1. Be aware of your debts

Although it may seem obvious, the first thing you should do is assess your current financial situation and recognize that you have debt, knowing that you need to get out of it or get it under control so that you can open yourself up to different solutions and action plans to clean up your finances.

2. Calculate how much you owe

It follows that you know exactly what the amount of your debt is so that the plan can be fully adapted to your situation and the chosen strategies can be applied precisely.

3. Determine your fixed expenses

There is always a portion of the income you have that goes towards paying fixed expenses, and it has to be that way because these are necessary family expenses to support the home. Look at how much you invest in them and try to eliminate some that are not essential to your daily life so that you have more funds.

4. They don’t accumulate more debt

Once you are clear about your disposable income after expenses and how much you owe, it is important not to accumulate more debt, but to focus on eliminating and properly managing the ones you have, that way the plan you decide to implement will be successful. and you will see good results..

5. Set a plan

Now is the time to put a strategy in place to deal with debt in the best possible way because a plan speeds up the process and gives you a clear idea of ​​what you should be doing.

Reasons why Mexicans default on their debts

Debt elimination methods

Below are some effective methods you can use once you have your debts well defined and the income you can allocate to paying them off:

Highest interest method

This system consists of creating a list of debts that have the highest interest rates, such as a particular loan or what you owe on a card, and focus on solving them as a priority. Getting out of the most difficult situation will bring great relief to your finances.

snowball method

This is a system that works in reverse to the previous one, as the debts are ranked from the smallest to the largest and you have to pay the monthly amount required by the smallest along with the minimum of the others. Put as much money as possible on the smallest debt to pay it off quickly, and then continue with the next one, applying the same method, until you reach the biggest one and have more resources to pay it off.

Take care of yourself personal finance Ensure your family’s financial well-being with these tips. You will see the results in your pocket in no time.

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