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Debt is such a quagmire in which the more a person tries, the more he sinks into it. But with the right strategy and discipline this cycle can be broken. If you too are burdened with heavy EMIs and loans, then these 5 strategies can prove to be a game-changer for you.
1. The ‘Snowball’ Method: Start with Small Goals to Win
Psychologically, when we complete a task, our confidence increases.
strategy: Make a list of all your loans. First eliminate the smallest debt (like a loan from a friend or a small personal loan) which has the smallest amount.
Benefit: The mental satisfaction you get after clearing a small loan motivates you to take on the next bigger loan.
2. The 50-30-20 Rule: Discipline Your Budget
Shortage of money is often not due to lack of income, but due to lack of management. Divide your income as follows:
50%: Compulsory expenses (rent, ration, electricity bill).
30%: Loan EMI and other liabilities.
20%: Extra loan payment or emergency savings.
Tip: Adopt a “No Spend Challenge” and completely stop non-essential online shopping for the next 6 months.
3. ‘Loan Consolidation’: Make expensive loans cheaper
Interest rates on credit card dues and some app-based personal loans 36% to 42% Can be up to.
Solution: Talk to your bank and consolidate all these small and expensive loans into one ‘Debt Consolidation Loan’ Change to.
Benefit: Taking a big loan at a low interest rate will significantly reduce your monthly EMI burden and you will have to make only one payment.
4. ‘Side Hustle’: Extra income is the real shield
There is an old saying – “There is a limit to reducing expenses, but there is no limit to earning.”
Start extra income through freelancing, content creation or any of your skills in today’s digital age.
Rule: Do not increase your lifestyle with this extra income, rather use every rupee of it only in reducing the ‘principal amount’ of the loan.
5. Mental and Vaastu Balance: Infusion of positive energy
Mental strength is essential to fight debt.
Vastu: Keep the north-eastern corner (Ishan Kon) of the house clean and open, it is considered the door for the arrival of wealth.
Discipline: Paying the loan installment on Tuesday is considered as ‘debt redemption’. Religious beliefs and recitation of hymns give you the patience and determination needed for a long battle with debt.