The 2nd Step to Get Your Finances Sorted - Deal to Garbage Debt

After you know what you want and need then the next step is about your garbage debt. Let's see how you can deal to garbage debt. Debt is the biggest problem facing many women. I am talking about what I call "garbage" dept, debt that we have run up on credit cards, hire purchase agreements and personal loans. You can have good debt, debt that will make you wealthy such as a mortgage or student loan. The problem with garbage debt is:

It makes you poor because you are spending your money on things that lose value or have no value as soon as you buy them such as cars, fridges, clothes, holidays, and entrainment.

It is very costly because you are paying a lot more for all of these things than if you had paid cash. I see clients who are handing over a large proportion of their income each pay period just to repay the interest on their garbage debt. The food has been eaten, the clothes are now dusters, the car and fridge are worth almost nothing but they have to pay and pay for years to get rid of the debt. Many credit and store cards charge interest rates of more than 15 per cent so unless you can pay off the debt very quickly it starts to grow and grow.

What should you do?
Arrange your debs in order of cost, that is, with the highest interest charges on top. After that continue to pay the minimum on each of your debts. Now, put every other Baht you can find towards the one with the highest interest rate, as that is costing you the most for every Baht you have borrowed. As soon as you have finished the first one, close the account. Then move on the next until they are all gone.

And the last thing is making a decision that you will never take out a credit card, store card or hire purchase deal again. No one needs a credit or store card, but it is very tempting to go shopping with plastic if you have them. And these kinds of debts make you poor and keep you poor.