How to pay the debts and not get the name dirty

Indebtedness is a reality in the lives of most Brazilians. According to Serasa Experian, Brazil currently has around 60 million people with the “dirty name”. That is, 60 million people who made financial commitments that they could not pay.

Being in debt can be a source of stress. Money plays a very important role in people’s lives, bringing consumer goods, wealth, comfort, pleasure, power and freedom.

Many are the reasons that can lead you to get into debt. But the ways out of this mess are convergent: you HAVE to spend less than you earn.

If you do not know how to pay off debts and are afraid of getting the name dirty, first calm down. Let’s give you some tips on how to solve this problem and avoid entering the SPC / Serasa “blacklist” in three steps.

How not to enter the blacklist

Step 1: Organizing Accounts

You need to know that everything in life has a solution. If you are going through a bad financial time, get organized, get out of this situation and learn a life lesson, never to put yourself in this uncomfortable position again.

Credit cards, if they are not well used, can become the villains of your budget.

1- List all the money you earn

1- List all the money you earn

The first thing you need to do is list all your assets, that is, everything you get from money: salaries, rents, investment returns, etc. All money you receive regularly needs to go into this account.

By doing this, you will map all your income. This also helps you see who spends the most time and earns more and with what is selling your time for less.

It will facilitate future decisions when prioritizing what type of activities to devote more and which activity is not yielding to you satisfactorily.

List all your debts and expenses

List all your debts and expenses

At this point we need to talk. Be very honest with yourself here and list yes, all the debts, absolutely all, overcome and overcome.

Also make a list of expenses, even the small ones of the day to day. You need to know how much you spend to live.

It is important to make separate lists: Debts are the problem you want to solve. And expenses are costs of goods or services that you use.

3- Classify your expenses

Before we start fighting the debts themselves, you should classify your expenses as:

– Essential : These are the ones that you can not give up in any way for your subsistence. Ex: rent, condominium, account of light, expenses with supermarket, remedies.

– Necessary : These are the ones you need, but are not essential to its maintenance. In this case it will depend a lot on what you prioritize in your life.

For some people the gym may be needed, for other people it may be college, kids college or cable TV, internet. Here the situations will vary according to your standard of living.

Note: We know that education is investment, but it is long-term investment. And we often have to sacrifice long-term investments to achieve the tranquility we need to devote ourselves to what we really want to do.

– Superfluous : Are those expenses that you have regularly, but that could not have, because they are neither necessary nor essential. At this point, also the variations are according to your standard of living. Examples include going to expensive restaurants, car expenses (if you do not use a car for work), subscriptions to newspapers or magazines.

Step 2: analyzing the financial situation

Step 2: analyzing the financial situation

If you got here, you probably already have a pretty interesting general notion of your spending. Now is the most painful, BUT NECESSARY AND URGENT part if you really want to pay your dues and not get dirty name.

Depending on your situation the numbers may discourage you. Do not give up! Face the situation, however bad it may be.

1- Make expenses cuts

1- Make expenses cuts

Review your spending list. See everything you’ve related what you get comfortable to cut already, right away. Make these cuts, cancel everything you can, are not using or do not feel uncomfortable to cancel.

2- Reduce expenses

2- Reduce expenses

In the second stage of analysis of your list, make reductions. Which of these contracted products and services can migrate to a cheaper plan? Some Suggestions:

– Can the TV package be exchanged for a cheaper plan with fewer channels? Do you and your family actually watch all these channels?

– Can the internet package be exchanged for one with a lower speed or another operator? How much do you and your family use the internet?

“Do you really read the entire paper every day?” Could you read the newspaper online?

– Is the mobile plan adequate for your expenses and for your family? You can check mobile plans with internet or TV, or study the migration from postpaid plans to control or prepaid plans.

“Do you use the car regularly?” If you do not use it, think about the possibility of selling it.

3- Compare what’s left of revenue x expenses

After these analyses, here’s the next point: how much of your salary and income do you need to live?

All of your expenses are now graded and need to fit within how much money you receive per month.

By now, everything you earn is expected to be enough to pay for your expenses. But if it is not, you will need to re-examine your spending list and reduce further expenses.

Use the rankings to help you see what you can temporarily or permanently give up to make your paycheck pay your bills. Consider including a change of housing if this is a very large burden on your budget.

Alongside this reduction in spending, you can also look for ways to increase your income. But your standard of living has to fit within how much money you get every month and a little left over. This is essential for you to move on to the next step.

Step 3: Paying the bills

Step 3: Paying the bills

Now that you’ve raised your bills, organized and managed to put everything within your budget, you need to pay off your debt!

Collect as much money as you can. Even the piggy bank may be the amount that is missing right now.

1- Increase your income

Sell ​​products by catalog, do something at home to sell, do some specialized service that you know about, give private lessons, get a second job, increase your monthly income.

2- Get more money

Take a tour of your home. Surely you have things you do not use indoors and some you do not like and you do not know why you’re there. Sale!

Make a general storage in the closets and sell clothes, utensils, electronics, everything you have at home and do not make more sense, is not using or is duplicated. Advertise on OLX, Enjoei (and other specialized sites) or even social networks.

In addition to raising a little piece of furniture to help pay off your debts, you’ll be improving your home’s mood by getting rid of things you no longer use.

3- Negotiate and pay the debts

3- Negotiate and pay the debts

Finally we get to the main point. You should now pick up your debt list and negotiate them one by one so that they all fit within your new budget. Negotiate even those that have not expired, if they are priceless within your new budget perspective.

It is important to note that although you may feel a huge desire to simply settle your debts at once, in cash, if you have been able to clear good money from the previous tips, you have to negotiate:

– Discount, for cash payment;

– Interest, for forward payment.

If the money you have found has not yet been sufficient, check credit lines with your bank. Try to exchange an “expensive debt” (such as a credit card) for “cheap debt.”

Review interest rates, see how much you will be paying at the end, for effective interest. Compare banks, fintechs, plus other credit companies and see which one is worth the most. It’s no use paying less if you can not afford it.

At this point you have to prioritize the reestablishment of order in your budget. You have to get the best, the cheapest and what you CAN pay.

There are on the market lines of credit using your FGTS balance as collateral or the option of borrowing with collateral.

Secured lines of credit have lower interest rates than direct consumer credit, for obvious reasons: they have a guarantee.

If you do not pay, you may lose the guarantor, so take a good look before hiring and make sure that you can actually make those commitments within your new budget.

I hope these tips can help you get out of debt. If you are unemployed and without income it can be a little more difficult to organize the budget, but it is not impossible!

Look for some income even if you are not able to meet all your commitments at first, little money is always better than no money.

And remember: If you are spending more than you earn, you are living in a standard of living that is not yours.

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