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Tips on How to Settle Debts

There is so much going on in the world nowadays. Many countries’ armies are fighting the war against terrorism, but, more often than not, the lot of you who aren’t directly involved in the war against terrorism often have a more terrifying enemy surrounding you all the time. DEBT!

Most of us are clueless on how to beat this terrifying monster. We’ve submitted ourselves to its tyranny, and don’t think of ways to beat it. However, this article will give you some tips on how to settle debts:

1. Watch your spending habits
Though most of us are always on the lookout on how to increase our potential earning, we rarely sit back and think about how to control the way money escapes from us. The best way to control your unwanted spending habits is to keep track of what you spend your money on, so that you’re aware of where the money goes.

2. Don’t fall for credit cards
A lot of people give into the temptation of using credit cards because they give you an unsecured loan, which means it’s extremely easy to obtain a credit card. They compensate for this by charging you exorbitantly high interest rates.

3. Pay off your bills on time
People fall into the trap of thinking it’s ok if the minimum amount due is paid. Most bills will require you to pay interest on the amount that you have left unpaid, which is, frankly, a royal waste of money.

4. Carry cash wherever you go

Yes, the credit card adverts always say that a credit card is a good companion because it gives you cash when you need some. However, studies have shown that people tend to spend less when they have cash in hand.

5. Work out a budget

Before the start of every month, draw up a budget. It doesn’t have to be complicated. Just write down the income you expect for the month, and the amount of money that you have to spend. This’ll show you some potentially unwanted expenses, which you can cut down on. Just make sure that you stick to your budget as hard as possible, once you draw one.

6. Make a clear distinction between your ‘wants’ and ‘needs’
Both of them may sound similar, but, in fact, there’s a very significant difference between wants and needs. Needs are the necessities of life, like food, clothing, house, etc. Wants are all those ‘not – so – important’ stuff that you always want to buy. A good example is that newly released ‘Samsung INNOV8’ mobile phone. It has so many fancy features, but, think deeply about it, and you’ll realize that, out of every 10 features, 8 are unnecessary. Frankly, a Nokia 6070 would very much suffice, as it has all the basic necessities of a phone rolled up into a nice package.

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