Debt Burden
There is a common practice of sending your disposable income straight to your savings account. Its a widely practiced common mistake by individuals who are in debts and financially less aware. More priority is given by such individuals to accumulate a decent saved sum by the end of the year by delaying to pay debts as much as they can.
The Result of Delaying Debts
All debts are subject to the period they are borrowed and kept, and the charge ( interest ) on debts such as
debts through Credit Card , Overdraft payments rise over the period they are prolonged.
I am in debts what should i supposed to know?
Given the situation above now lets see some of the options you might consider worthwhile to consolidate and to find the right course of action to pursue.
Seeking help from family? Unless you were lucky enough to born in a family of finance lawyers of Bank Managers, you are unlikely to find the guidance you need to tackle your debt consolidation issues.
Speaking to the Bank?
If you have ever thought the Banks are there to advice you and have your best interests at heart to save you money or make you debt free. It should be a no no in any case. With the stories emerging of the failures and lost cases by Banks over charging unlawful charges imposed on their customers, you should be alarmed by now.
How to can you be debt free and save more
Get rid of debts first
Ideally if you have the capacity to set off your debts, you must do so in the first instance, and there is no point delaying payments to expect some savings.
Here is how it works;
Lets suppose you have 100 pounds worth of debt at 18% interest and your bank offers 5% on your annaully on your savings. You have been paying inerest on the 100 pounds borrowing by the end of the year you will have paid 18 pounds. You have been keeping your access money in the bank which will have earned you 5 pounds on a 100 pound saving at 5% interest.
Solution: Instead of delaying the repayments, if your financial conditions allow you, you should withdraw 100 to set off your debt immediately. Saving you 18 of the interest charges and you lost income on the 100 withdrawn would be 5 pounds only, still saving you 13 quids in total.
debt management, how to be debt free, how to save more, savings & investment, Savings & Investment, savings and investment
