How to get out of debt. Simple recommendations for financial literacy and discipline

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Getting rid of debt may seem like a daunting task, but the right approach and discipline will help you quickly achieve financial freedom. It is worth following some rules.

Debts are not a sentence, and even in a few months you can make significant progress in paying them off. “Telegraph” will tell you exactly how.

Analyze your financial situation

• Make a list of all your debts. Write down the amount of each debt, the interest rate, the minimum payment, and the due date.
• Evaluate your income and expenses. Understand where your budget is going and determine which expenses can be reduced.

The “snowball” or “avalanche” method

• The “snowball” method. First, close the smallest debts, gradually moving on to larger ones. This gives the psychological effect of victory.
• The “avalanche” method. Pay off the highest-interest debts first, which saves you money in the long run.

Set a clear budget

• Set aside a fixed amount to pay off your debts each month.
• Reduce spending on entertainment, clothing, or other non-essential purchases.

Avoid new debt

• Get rid of credit cards. Use only the funds you have.
• Plan big purchases only after you’ve paid off your debts.