I want to share ways and strategies for dealing with multiple debts


Debt is a financial liability problem that burdens finances and needs to be resolved. Many people fall into deep debt for various reasons. How to get out of debt quickly and get financial freedom? I dig 10 tips on how to be free from a lot of debt based on the advice of a financial planner and my personal experience. Not easy but it can be, debt freeway now!

Debt is a problem I've had and very draining of my mind - credit card debt. Receiving credit cards from famous foreign banks at that time made me happy and proud. Instead of using it as a means of payment, I use a credit card as a means of debt.

In no less than 1 year, my credit card debt has mounted. It took 2 years for me to focus on completing and free from this credit card debt. An extraordinary experience made an impression on me until now.

Fortunately, at that time, I didn't have a family yet so this financial problem didn't bother other people relatively. My girlfriend, who is now a wife, doesn't know about this financial problem.

From this experience, I understand how bad it is to have a lot of debt, to be chased after financially dire bills every month. Hearing stories of friends or friends who are in debt so much that they have to sell assets, or even sacrifice the quality of children's education to pay off debts, makes it sad. It must be heavy!

In this article, I want to share ways and strategies for dealing with multiple debts and how to solve them. How to be debt-free!

# 1 Admit You Have Debt
The most important thing in my opinion is that the first debt-free solution is to admit that having a lot of debt (if there is not much debt, there is no problem) and that a lot of debt is eating away at finances because of a larger consumption pattern that pegs up the pole. Greater expense than income.

If you do not admit that you have debt, due to a lifestyle that is larger than the stake, you have no urgency to find a solution.

As a result of no urgency, debt slowly but surely swelled. It is more difficult to solve an already large debt problem than when the amount of debt is still small.

# 2 Be open about Debt
The most common cause of large debt is family problems. The demands of the family need to make the consumption force more peg of the pole, which leads to the act of taking on credit debt.

Therefore, the second many debt-free solutions, if problems related to debt arise, it is better to discuss them in the family as early as possible. Because families can be invited to discuss and find solutions.

The problem is, often the head of the family is reluctant to reveal if there are financial problems that cause him to go into debt. Having debt is indeed a taboo thing to talk about for many people. Parents do not want to disappoint their child's wishes even though in the end they have to borrow money.

If the debt problem is a demand or the wrong family consumption pattern, the best way is to discuss this matter with the family and together to find a way out before the debt increases.

I have heard stories of wives who quarreled with their husbands because their wives found out that their husbands had debts when debt collectors came home to collect them. The husband finally admitted that he was in debt because of the demands of domestic needs.

# 3 Debt Analysis
After acknowledging the existence of debt and being open with the family about this financial problem, the next step is to analyze the condition of the debt and its impact on family finances.

First, find out how many total debt obligations you currently have. Sort out debt based on the type of debt, for example, credit card debt, others.

Second, how much each month must be spent to pay debts. What is the trend of paying debt every month, is it increasing or not.

Third, determine whether the debt has endangered finances every month or not. The simplest example is if you can't save anymore because your salary is used up to pay debt installments.

Fourth, calculate how much debt must be repaid if you want your finances to be healthy again. It means being healthy is that you can go back to saving.

In general, the normal guideline is a maximum of 30% of income to pay off debts. If it is over 30% of your salary to pay off debt, your financial condition is definitely in trouble.

After doing this analysis, you should be able to know what debt is causing your unhealthy financial condition. Which credit installments drain your salary each month significantly leaving you with no funds left for investment.

# 4 Recognize Types of Debt
You need to know that types of debt vary and because the types are different the implications are also different.

Debt is used to get something. If what debt buys is an asset then the debt is not a bad thing. Because the value of assets purchased with debt increases over time, so the cost of debt is smaller than the benefits provided by assets.

An example is mortgage credit. You buy a house or apartment in installments through KPR where the installment value of your house will increase. Generally, the increase in property prices each year is higher than the interest rate. This means that an increase in the value of your assets can cover the costs of borrowing debt.

If the KPR debt is to be repaid, the results of selling the house will be greater than the remaining debt. Business credit is seen as "good" debt because it has a productive purpose. Provides greater results with business increases compared to monthly installment obligations.

"Bad" debt is debt for consumption. For example, going into debt to buy cell phones, traveling, shopping, and other consumptive activities. The result is not an increase in assets because the goods purchased are consumer goods with decreasing value. Does not produce productive assets.

You need to recognize which types of debt you currently have fall into which category.
Consumptive or productive.
You have to settle the consumption debt first.

# 5 Financial Consulting
Resolving debt is not an easy matter for many people. Apart from taboos, many people do not understand finances. Cool language, low financial literacy. In short, blind about finances. If financial literacy is low, let alone making resolutions or finding a way out, what are the problems you may not know?

You can ask a professional to help dissect your financial problems. Go to a Financial Planner.
There are several free, no-cost options that you can do, namely:

First, buy a financial planner book, read and understand it well. Currently, many financial planners have written books that discuss family financial problems nicely.

Second, listen to the financial planner broadcast on radio, U Tube, or podcasts. In this technological era, information about financial planners is abundant and can be obtained for free.

Meanwhile, if you want a paid one, you can choose from several options, namely:

First, come to seminars or workshops held by financial planners.

I know some well-known financial planners have regular classes on a wide variety of financial topics.

Fortunately, joining the workshop is that you can interact directly. Can do direct questions and answer straightforwardly according to the problem you are having.

Second, do a private consultation with a financial planner to analyze your financial problems and ask for advice on how to solve these financial problems.

I had this consultation with a financial planning office in Jakarta several years ago.

Before consulting, I have to fill in financial data in a spreadsheet and during the consultation time, the financial planner shows the analysis results of the financial data that I filled in. In the end, I received recommendations about improving my financial condition.

The consultation fee is relatively affordable, the time is solid and the analysis is insightful. For me, this consultation is very helpful.

Third, make a plan or financial planner. Making this plan I know is the most expensive but the most comprehensive because you are taken to financial planning for the future.

Including if you have a debt problem, in the plan you will be helped to plan a strategy to overcome the debt problem.

What needs to be realized is that financial planners are limited to giving advice, helping to make plans, and sharing experiences. However, the execution or execution of the financial plan is done entirely by you.

If you are lazy, reluctant, or have other problems so that the plan that has been made cannot be executed, it is your business and the financial planner cannot help.

# 6 Expenditure Evaluation
Things that are often overlooked and considered trivial when doing financial planning is the evaluation of expenses.

Recording expenses per month is very helpful for calculating and seeing what expenses are not needed and can be deducted in the next month.

In essence, these records are useful so that finances are better monitored.

I believe that the problem for many people is not in income but in spending patterns. Expenditures that exceed the limit make finances unhealthy.

To be able to solve these spending problems, the main thing that must be done is to know what and how much you spend each month.

The problem is, many people never know the pattern of spending each month. So the first step is to record expenses.

After taking notes and evaluating them, it would be even better if you and your partner set a maximum expenditure per month.

So, there will be some kind of limitation on how much the maximum amount of funds is used for spending each month and avoiding expenses that should not have happened.

# 8 Interest, Debt Fines
One thing that people often forget when borrowing money is the amount of interest and fees that must be paid. Especially if the type of debt taken is consumption debt, namely credit cards and unsecured loans.

Most of the debt problems faced by employees or workers are credit card debt or KTA. Now with online loans, how to get into debt is even easier, with just one click of cash loans that have entered your bank account.

Some important things to understand for those of you who owe consumption are:

First, even though the loan ceiling is small (under IDR 3 million), the online loan interest is very high. The average rate is 20% to 24% per month. With very high-interest rates, the obligation to pay debts becomes heavy.

Second, paying credit card bills in the minimum amount will not solve your debt. The interest on a credit card that is high enough to make the minimum payment only reduces the principal burden of the loan is very small so that it will take a long time to pay off the credit card. And that's assuming that you don't add new credit card debt every month.

Third, apart from high interest, loan admin fees are hidden costs that you have to pay. This admin fee is not visible, even if it burdens the obligations you pay.

On a credit card, if you are late in paying your bill, you will be subject to a late fee of IDR 150,000 per month. Not a small amount.

Online loans are no less imposing admin fees. In some loans, the loan ceiling disbursed is cut in advance for admin fees so that the borrower receives less than the agreed ceiling but has to return the loan at the agreed ceiling.

# 9 Debt Restructuring
You have the intention but don't have the money to pay off the current debt. The advice I'm talking about!

Who are you talking to?

Talk to the person who owes you the debt.

Lenders everywhere want loan funds back with principal and interest. The problem is, they want the principal back.

Therefore, immediately discuss with the lender the options you have. Do not shy away because it will only burden you with all the costs.

Some of the options you can do:

First, if you have credit card debt, you can change it into installments for several months. In this way, credit card current interest is converted into relatively cheaper fixed installment interest.

However, when changing to fixed installments, make sure that you don't take on new credit card debt anymore. If not, you will continue to face non-stop credit card debt problems.

Second, transfer it to another bank with lower interest, which is also called the Balance Transfer program. Some banks offer bill transfer programs with the lure of cheaper interest.

However, again, this method will not be effective if you still owe a new credit card. Make a balance transfer and stop new credit card debt.

Third, for KTA loans, you can ask for a reduction in installments by extending the loan tenor. This method of debt restructuring allows you to breathe more because of lower installment expenses, even though the total interest that must be paid later becomes larger due to the longer loan period.

Fourth, for those who have been in arrears for a long time and have been poorly recorded on BI checking, banks are usually willing to provide hair-cuts or discounts on the number of customer loans. This facility is provided on a case by case basis, depending on customer submissions and bank policies.

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