Here’s How to Save Yourself from Drowning in Debt

The fact that you’re reading this could mean two things: you’re on the brink of drowning in debt or you’re already in one. If not, then it’s still good to know that you plan to stay debt-free.

Being in debt is one thing, but drowning in it is another. Seeing those unpaid bills piling up and struggling to settle them one by one can be emotionally and mentally stressful. But you don’t have to dwell on your worries. There’s a way out.

Pull yourself out of this unfavorable situation with this step-by-step guide.

 

Planning

  • List down all your debts

Making a list and checking it twice allows you to know which of your debts you’ll need to prioritize. Find out which one has the highest priority. Factor in the amount, interest rate, and the deadline you have to meet. This may be one agreed on with a friend or relative, or perhaps a due date from the bank before being penalized by interest.

  • Review your income and expenses

A huge part of financial planning is knowing how much money you earn and how much of it you spend. This allows you to find out where it all goes since your expenses are where most of your financial problems are rooted.

For someone who has a regular monthly income, it’s going to be easier to know how much money comes in. The challenge lies in controlling the amount that goes out, so it’s crucial to keep track of it at all times, especially if you are heavily in debt.

  • Look for ways to boost your income and reduce your expenses

The reason you may be in debt and having a tough time paying it off is due to inadequate income. If this is the case, you should have the initiative to find other ways to boost it. There are many extra income opportunities that you can get involved in if you have the right skills and you know where to look.

With the rise of telecommuting, there are many freelance opportunities out there that you can earn from. You can be a virtual assistant, or if you have the knack for writing perhaps you can be a web content writer. If you are into photography, you could sideline as a lensman during parties and weddings. Are you good in academics? Maybe you can tutor your neighbor’s children.

 

Settling Your Debts

  • Pay more than the minimum

You may have the option to pay the minimum balance on your credit card bill, but this will only take you longer before settling your debt. What’s worse, it will also cost you more in interest charges. Calculate the maximum amount you can pay off your total debt in the shortest time possible and make sure you stick to it.

  • Settle your highest interest debts first

Take a closer look at the result of your calculations: it’s important to know which of your loans have the highest percentage in terms of interest.

One of the reasons it’s hard to get out of debt is due to the amount getting bigger over time. So if you don’t chip off a considerable amount quickly, you’ll end up paying more in the long run. This will make it a lot more challenging to stay financially afloat.

The next time you’ll need extra cash, find the opportunity to get loans with smaller interest rates from companies that provide online lending in the Philippines like Cashalo. Aside from affordable rates, Cashalo is also known for giving fast approval with no hidden penalties and fees.

  • Use your extra money to pay off debts

As a regular employee, you will have the opportunity to earn extra from work such as a tax refund, 13th-month pay and Christmas bonus. Instead of spending them all on shopping for products you don’t need, why not use the money to pay off your debts? It’s way better to be debt-free than sporting that new pair of sneakers.

 

Staying Free From Debts

  • Live within your means

Spending more than you can afford is the reason why you’ve fallen into that deep hole of debt. Once you’re free, you should learn how to live within your means. So if you go to the mall and spot an item that seems to have this magnetic effect on you, take a moment to think and ask yourself if you need it. If so, will it fit into your budget?

  • Keep saving to build your emergency fund

When you’re debt-free, you can move on to one of the most important parts of handling your finances: saving money for emergencies. This can prove to be invaluable in times of unexpected events where you’ll need funds immediately.

Set a goal when building an emergency fund so you can develop a plan around it. This is where you’ll be able to set aside a specific amount to save for your emergency fund. Once that’s set, open a savings account at your nearest bank. And remember, always stick to the plan.


Being heavily in debt is a place you don’t want to be on a financial standpoint. If you’re already in one, it’s imperative to take the necessary measures to get out of it. And if the need to take a loan ever arises again, choose Cashalo and take advantage of its low interest rates compared to other online loan providers. Download the app now for fast, easy and affordable online loans.