I have debt of 4000usd how to pay back any idea?
how to manage
plz advice
Answers:
First you need a baby emergency fund ($500-1000; if you make less than $25k then $500, over $25k then $1000) so you don't go into more debt (credit card) when you have an emergency (furnace goes out, basement floods, etc).
Then start with a budget. Account for every dollar coming into the house and put a dollar amount by each category going out. Put extra money towards the lowest debt owed. At the end of the budget, it should equal zero. It doesn't mean you "spend" every dollar, some money may be set aside for the every 6th month car insurance bill or the emergency fund or school clothes (if you have school aged children, they will grow this summer), etc.
When the lowest debt is paid off (you will feel great!) then you put all that money on the next month. Let's say you were paying a total of $120 on the lowest debt ($20 minimum payment + $100 extra money) then you roll that $120 over to the next smallest debt and add it to the minimum payment you are paying on that bill. Example, bill 2 minimum payment is $40 add the (now "extra") $120 to equal $160/month until that bill is paid then roll the $160 on the 3rd lowest bill’s minimum payment. (This is called a debt snowball.)
For budgeting forms go to Dave Ramsey's website. You can print off the forms from his site. I also suggest you read his book The Total Money Makeover. His book tells you what to do after you get out of debt and also why do a budget and why have an emergency fund before working on debt and why you pay the lowest balance verse lowest interest rate. (You pay the lowest balance because psychologically it will keep you motivated to keep going and pay it all off. If you don't have "quick" results many people give up. He also has done the math and paying the highest interest to lowest or lowest balance to highest balance ends up paying off all debts in about the same time give or take a month or two.)
You can do it, you just need a plan. Above is a start to a plan and Ramsey's book will give you the rest of the plan (you can check it out from the library or check out his website for sales- he often sells it on line for $10.)
Good luck! You can do it!
Work out a payment plan with who you owe.
Then reduce spending or find additional income to get it paid off.
If you are getting a solution for that just share with me. I shall give you 4000 USD .
You can always pay back debt, and your debt is not so large - many people have much greater amounts of debt, so take some comfort there.
First, get a copy of your credit report - you can do this from many online services. This will show you exactly where your debts are. Next, look at how old some of the debt is, and, if it has gathered up a lot of interest (in other words, has it grown more and more expensive since it's been past due?). If part of your debt is credit cards, pay them first since they accumulate the most interest and will cost more.
The best overall advice I can give is that you should try to clear up one debt at a time - if you try to pay everyone at once, it's not nearly as effective than if you clear a whole debt for good.
Here is an example:
If you have a credit card debt of $500 on a particular card, make a committment to pay $100 per month until it is fully paid. IF you can pay more than $100 per month, go ahead - it will just make things happen faster, BUT, stick to that plan you've made. If this bill is with a collection agency, call them and tell them that you will be making these payments. Sometimes, when you're willing to work out a payment plan, they will reduce the debt.
Make a plan for each debt and stick to it. When that credit card is paid off, start paying the next debt. This way, you're helping your credit rating as the debts fall off your report once they're paid.
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