Recurrent debt deserves careful analysis
Posted: Mon Jan 27, 2025 9:36 am
I am in debt and I am worried, as this is not the first time this has happened. What should I do to reverse the situation?
Jaques Cohen, CFP, responds: Dear reader, thank you for your question, which concerns the reality and health of many Brazilians. Debt can involve a huge emotional burden and affect people's psychological capacity.
Paying off debt is a medium-term task and, strange as it may seem, I suggest you start by reflecting on the future and your personal aspirations. They can be the motivation to face the problem head on. The past is also important, as it is possible that the situation will repeat itself if you do not understand its origin, which may be emotional.
Your planning will depend on your particularities and nepal number dataset level of debt, so I will list guidelines without the intention of providing absolute truths.
I suggest starting with a photo that includes a balance sheet with assets and debts and a flow of what comes in and goes out of your account. This can be done with the help of apps and spreadsheets or even on paper. Use whatever makes you feel most comfortable. If you are married, consider drawing up the plan as a couple.
I'll start with your debts. The suggestion is to map out their total value, even if they are up to date. Don't confuse this total with the value of the installments, which fall month by month. By debt value, we try to find out how much you would need to pay today to settle everything with all your creditors. Even if you don't have the money in hand, this survey will help you know the scale of the challenge.
You may also have accumulated assets: financial investments, assets, and shares in companies. If so, you may want to consider selling them.
But look at the alternative with caution, it may only be a temporary solution to a larger issue. With or without equity, your strategy will involve understanding what goes in and what goes out of your account.
The income should be understood after taxes. It seems simple, but in the rush of everyday life, many people don't know exactly how much they earn. If you are self-employed, this calculation may require a little more work.
On the other hand, when dealing with expenses, many people feel discredited or lost. Try to stay calm and base yourself on past expenses to avoid self-deception. In addition to thinking about what goes out each month, you need to look at what doesn't happen regularly, such as property taxes, travel or clothing.
Before reviewing your cash flow, pay attention to commitments such as health insurance and mortgage financing: failure to pay them can have more serious consequences.
Jaques Cohen, CFP, responds: Dear reader, thank you for your question, which concerns the reality and health of many Brazilians. Debt can involve a huge emotional burden and affect people's psychological capacity.
Paying off debt is a medium-term task and, strange as it may seem, I suggest you start by reflecting on the future and your personal aspirations. They can be the motivation to face the problem head on. The past is also important, as it is possible that the situation will repeat itself if you do not understand its origin, which may be emotional.
Your planning will depend on your particularities and nepal number dataset level of debt, so I will list guidelines without the intention of providing absolute truths.
I suggest starting with a photo that includes a balance sheet with assets and debts and a flow of what comes in and goes out of your account. This can be done with the help of apps and spreadsheets or even on paper. Use whatever makes you feel most comfortable. If you are married, consider drawing up the plan as a couple.
I'll start with your debts. The suggestion is to map out their total value, even if they are up to date. Don't confuse this total with the value of the installments, which fall month by month. By debt value, we try to find out how much you would need to pay today to settle everything with all your creditors. Even if you don't have the money in hand, this survey will help you know the scale of the challenge.
You may also have accumulated assets: financial investments, assets, and shares in companies. If so, you may want to consider selling them.
But look at the alternative with caution, it may only be a temporary solution to a larger issue. With or without equity, your strategy will involve understanding what goes in and what goes out of your account.
The income should be understood after taxes. It seems simple, but in the rush of everyday life, many people don't know exactly how much they earn. If you are self-employed, this calculation may require a little more work.
On the other hand, when dealing with expenses, many people feel discredited or lost. Try to stay calm and base yourself on past expenses to avoid self-deception. In addition to thinking about what goes out each month, you need to look at what doesn't happen regularly, such as property taxes, travel or clothing.
Before reviewing your cash flow, pay attention to commitments such as health insurance and mortgage financing: failure to pay them can have more serious consequences.