Steps & Tips to Get Out of Debts

Ate Jo's Podcast

In this episode, I’ll walk you through the personal steps I took to get out of debt and share some practical tips I’ve learned along the way. These strategies will help guide you toward financial freedom. Whether you’re dealing with personal loans, credit card debt, or other financial obligations, these actionable steps can make a significant difference.

Steps to Pay Off Debts:

• List All Your Debts:

• Write down all your debts, including those owed to friends, family, banks, and others.

• Arrange by Interest Rate:

• Organize your debts from the highest to the lowest interest rate.

• Prioritize High-Interest Debts:

• Focus on paying off the debt with the highest interest rate first while continuing minimum payments on the others.

• Once that debt is paid, move on to the next highest interest debt, and repeat the process until all debts are cleared.

• List Your Income:

• Record all sources of income, such as salary, side gigs, and business earnings.

• Determine how much you can comfortably allocate towards debt payments after covering necessities and setting aside emergency savings.

• Talk to Relatives and Friends:

• If you owe money from them, politely ask if you can repay the amount in installments.

• Consolidate Debts:

• Transfer your debts to the account with the lowest interest rate and pay it off in manageable installments.

• Track Unnecessary Expenses:

• Identify and list your non-essential expenses, then use the money saved to pay off your debts.

Tips for Managing Debt:

• Avoid Minimum Payments:

• Paying only the minimum will not slow down your debt repayment. Always aim to pay more than the minimum to reduce your balance faster.

• Discipline Yourself:

• Don’t buy anything you can’t afford, especially when you're trying to pay off your debts.

• Use Cash or Debit Cards:

• Avoid credit cards and use only cash or debit cards to control your spending. Consider leaving your credit cards at home.

• Set Aside Emergency Funds:

• Always save a portion of your income for emergencies, so you won’t need to rely on more debt in unexpected situations.

• Get a Side Hustle:

• Consider a side job or freelance work to increase your income, but don’t overwork yourself to the point of exhaustion.

• Annual Fee Waiver:

• If you have a credit card and are a good payer, request to waive the annual fee to avoid unnecessary charges and interest.

• Balance Conversion Option:

• Request a balance conversion from your bank to break your debt into smaller, manageable monthly payments with a lower interest rate. Stick to the payment plan to avoid additional fees.

• Balance Transfer:

• If you have credit card debt, consider transferring your balance to another card with a lower interest rate, but be sure to stay on top of your payments.

Debt repayment can be challenging, but with discipline, a solid strategy, and a clear plan, achieving financial freedom is possible.

Thank you for listening!