Debt clearance should always be the first priority
Every month when I get my salary, debt clearance is my first priority. That is what made me write this article. I recently got married and I spent over 20 thousand dollars for my wedding. This is something very common here in India. To be frank my wedding was one of the cheapest compared to that of my friends who spend even double the amount. As I'm the only major income generator in my family, I didn't have enough savings or enough money to do it without going for a loan.
I had to take around 15,000 dollars a loan for my wedding and that debt is going to be with me for the next 5 years before I become free. That's why I mentioned that my first priority every month is to pay my monthly due for the loan. I'm in a fast clearance plan so, I guess it would take only 3 years for me to complete the loan fully. But at the same time to get back to stability, it might take another 2 more years so, technically I will reach a breakeven only after 5 years. For any middle-class member in India, this is the case.
First priority is to clear my loan
Living with debt is not a great thing and most of the time the fear will always be there in our head. I personally don't like getting a loan but due to unavoidable circumstances, I had to get a loan. My wife is also coming from poor family background and that is another reason why I had to bear all the expenses of my marriage. From the day I got married, this is something that goes in my mind on and on. I have to clear my loans as soon as possible to save some money for my future. I do have the mandatory savings happening every month or every year but apart from that, I wanted to do some proper savings so that I can attain financial independence as soon as possible.
My parents were also against loans. When I got my education loan during my college time my parents used to say that living with a loan is like sleeping on a thorn bed. We will never know when it will hurt us. It is always better to get out of debt as soon as possible. It not only helps the quality of life but it also helps the mind. My grandfather wanted me to get out of the education loan burden soon, so he paid most of my education loan due.
Planning the debt repayment
Sometimes people get a loan or debt with high-interest rates. The reason could be because they were in dire need of the money and they did not have enough options in their hand while going for a loan. There is also a possibility that people might have multiple debts to repay. Choosing the one with the highest interest rates every month should be the first priority. Starting from the high-interest rate debt to the lower one should be the best way to repay the debts.
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Posted Using LeoFinance
