No matter what your circumstances are, being in debt can be a daunting situation and wreaks havoc on your finances. Most people aspire to pay down their debts or ward them off altogether but are unsure of the pertinent strategies needed to go about their goals. As a result, their debt keeps mounting to a staggering amount. If you are thinking of setting up business in Dubai, here are a few tips to manage debt and get out of it before setting up shop:
Getting Your Financial Data Together
Make a spreadsheet, incorporating all your debts, balances, interest rates and minimum payments. This would portray a better picture of what you owe before the situation gets out of hand. Organize the list in order of highest interest rate to lowest. Tallying up your minimum payments lets you know the minimum amount you need to put aside from your monthly income and helps you create an effective budget on a money saving goal. Similarly, knowing the interest rates helps you construct an efficient debt repayment strategy.
Creating a Budget
Paying off the debts should be your precedence and creating a budget helps you factor in debt repayment to your other expenses. Knowing where your money goes can help you identify key areas where you can cut costs. Add up your monthly take home profits and tally up all your necessary unavoidable expenses, such as the housing, transportation, groceries and utilities. If the sum of your indispensable expenses comes up bigger than 50% of your monthly salary, it might be tricky for you to pay off your debts in an expedient fashion and calls for a serious tweak to your lifestyle. Especially, if you are thinking of doing business in Fujairah Free Zone, you need to make a budget and stick to it.
Doing Your Homework
You should strive to look for alternate options to help you pay off the mounting debts faster. Paying high interest rates on your already staggering debt causes it to really add up, and makes paying it off that much harder. You might think about lowering the interest rates and based on your credit, you may qualify for much better interest rates on credit cards. If you are a student, you can check out student loan consolidation and Income-based Repayment. Depending on the situation, you can even be granted deferred payments for a certain amount of time, or in certain cases, be legible for student debt forgiveness programs.