New Year Resolution 2015: Efficient Debt Management
It is that time of the year when aim driven people and individuals who set goals for the coming year start noting down or make mental promises to them, simply calling these promises their New Year resolution. These resolutions are made to shape their life in a better way, improving their life in some way or the other. While people are quite dedicated in making these resolutions a reality, many of them fail to do so. Not that, they lack the will to keep their own promises but the crucial mistake being contagiously transferred from man to man of not properly planning how to achieve these goals.
According to a poll conducted by NFCC, “decreasing debt is the top new year resolution for many students.” While this indicates as a very beneficial sign, it also arises many questions in many minds. Questions like, will students or those indebted with student loans be able to accomplish this New Year resolution? Well, it is not as hard as one may think; all you need is the will to achieve this vital goal without it affecting your personal expenses or life in general. With that said, one must understand that having unreasonable expectations like in this case expecting you’ll be debt free in just a day, is actually unfair to yourself.
1. Plan it All:
The first towards achieving any goal is to have an achievable or realistic plan which can easily get you through. But before you start planning get all the information about the nature of your loan and repayment policies. Once you have the necessary information only then you’ll be able to plan it accordingly. Loan providing companies conduct counseling sessions to help people understand what ever will come along with the loans you’ll be borrowing, like interest rates, repayment structure and other hidden policies.
2. Look for Relief:
Even before you opt for taking out student loans, you should start searching for relief policies and programs to get you out of loan troubles easily. There are many beneficial programs offered by the government itself over federal loans. Need based and income based repayment plan is designed to make the repayments as easy as possible. However, even with these relief policies, one has to stay a step ahead and be cautious about these policies do not leave you more confused.
3. Live within your Means:
While you may be lured by many necessary or unnecessary spending choices, you should keep your loans and other expenses in mind. For that you will need to chalk out a budget plan, restricting your expenses and spending to a practical and adaptable level. But the problem occurs when people plan a budget while failing to stick to it. No matter at what stage of life you are at, you will always need a budget with a persistent behavior that keeps you right on track. While some of your costs are fixed there are many unnecessary expenses people indulge in. Minus your fixed costs like fesses, necessary life expenses, credit card and other utility bills etc. out of your total income. Then dedicate the remaining disposable income towards other necessary needs. Make sure you’re left with some money to utilize for savings and emergency funds.
4. Repay on Time:
A good rule of thumb, to actually managing your debts without them crushing you under the loan load, is to make the repayments on time. Also, some banking benefits allow you to increase the amount of your monthly payments. Paying more than the set scale of your monthly payments may sound impractical but it is the most efficient way to pay back your loans as quickly and easily as possible. It has always proved to help those with heavy loans by minimizing the period to half the expected standard time.
5. Save with a Savings Account:
Not many people may agree with this but opening a savings account with a high return rate. But this account should not just stay constant with the amount of savings you started off. Keep adding more to this account by making it a habit to deposit whenever you feel the urge for irrational or binge buying. This might seem tough but you would thank yourself later for putting your money to good use. Savings do not make one stingy but appear as a blessing in disguise at the time of need. Remember, finding money in your old jeans or bag; savings somehow give you the same feeling at some crucial instances of your life.
6. Debit not Credit:
Credit cards may seem like an attractive payment mode, but it is not as beneficial as you think. However, this unpredictable mode of payment is necessary to maintain your credit record and score; you can restrict your credit card use to one rather than many. Limit your credit card to a minimum payable number so that you can easily pay back. To pay off your purchases on time and to avoid getting into more debt troubles, you can utilize your debit card instead.
These easy management tips will pave way to accomplishing this resolution. It is obviously not possible to clear off your debt and loans in a year but it can make your repayments easy and quicker than what you expected.