Due to lack of Calculation and lack of financial planning India generally leave their life in debt.
Account in finance are two different things.
RBI: just 12 accounts responsible for 25% of bank debt. (8, 00,000,000,00,000 Rs/-).
Effects of Debts
To become happy you don’t need peace of Finance you need financial peace.
So here is Revolutionary idea 8 ways to get rid of your loan. If you have credit card cut it right now.
01. List your debts by interest rate in descending order.
So you make list like this
02. Pay Incremental gain exponential
pay more money to account which has higher interest. i.e. credit card, by doing so you will get exponential gain. this the right place experience the power of compound effects.
03 sell unnecessary items
“if buy thing you don’t need than you have to sell things that you need”- Warren Buffet.
sell the old item in your home and office that you don’t need anymore. the way to figure it out is that the item which is kept without use of one year. sell it own before it turn into garbage.
items like old furniture, TV, Electric appliances, old mobile, laptop, PC, heaters, bags, camera, appearance.
04 Temporary Downsizing
Evaluate: Gratification Expenses, dine-out expenses, entertainment Expenses, unnecessary monthly subscriptions, depreciating assets, non value adding objects.
if you control this expense you can save up-to 30% of your monthly expenses.
05 Pays loans with the Second Income.
if you and your wife both are working or you may be second source of income. than pay of your loan with secondary source of income.
sources of second income:
Website, Freelancers, part time Driving, paid social media .
06 Emergency Saving fund
You can have your emergency savings fund in form of RD recurring deposit all in form of FD fixed deposit. Because it’s very easy to withdraw money from RD and FD within 24 hours to 48 hours the liquidity is very high.
Now it is giving your money in mutual fund also become easier you can easily deposit or withdraw money from mutual fund account through your mobile phone so the liquidity of mutual funds also compare to RD and FD.
It’s also give you high rate of return is kept for longer time.
07 Habit of budgeting is extra blessing
have a data driven approach to your spending
08 Throw any excess case to your debts.
Spend your hard and money in just like spending on the think that you don’t need a buying the things that you don’t required roaming here and there travelling unnecessarily whatever extra case you have use it to pay off your debts.