How to manage your debts

Manage your debts

Debt is nothing more than a commitment to pay money acquired by the person who lends said money, usually a financial institution.

When they are under control, debts are healthy and should not affect your peace of mind or your pocket. However, when they get out of control due to poor financial management or planning, they can become a source of stress for you and your family.

Also read: How to avoid excess debt

Action plan

Living without debt or having it under control and investing our money will give us the peace of mind we need.

Here are some basic suggestions for making a financial plan that will help you stay in control of your finances and your debts:

  • Know your economic situation:
    Identify your assets, your debts, your expenses and the various responsibilities that involve unnecessary outflows of money.
  • Make your budget:
    Reduce superfluous or unnecessary expenses and allocate a percentage of your income for savings or investment.
  • Define your goals and priorities:
    Among them are the savings objective and the payment of your debts.
  • Give priority to debts:
    Use the money you save after adjusting your expenses to pay your debts, according to the amount and interest they generate.
  • Prepare an investment plan:
    After paying your liabilities, take advantage of the moment to prepare an investment plan that increases your capital and encourages savings.

Also read: How to eliminate debt

The future

It is very important that you prepare yourself so that your future and that of your family is secured, implementing financial strategies that encourage a culture of savings in your children, that prevent them from falling into unnecessary debt when they are adults.

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