Nov 03 • 3 mins read
Debt-Dragon Slayer: A Fun Guide to Financial Freedom
Hey there, savvy Indians! Are you dreaming of sipping chai in your dream home or cruising down the boulevard in a shiny new car?
Well, my friends, it’s time to tackle those pesky unsecured debts and give your creditworthiness a boost that’s Bollywood-worthy. And guess what? We’re going to do it in style!
Channel Your Inner Financial Guru: Get a Debt-Dragon Slayer Plan
Imagine your unsecured debts as a dragon, and you’re the knight in shining armour. The first step to financial freedom is creating a master plan, a ‘Debt-Dragon Slayer Plan,’ if you will. List down all your debts, big or small, and set a goal to slay them individually. Break it down into manageable chunks and tackle the high-interest ones first.
- Let’s say you have a ₹50,000 credit card debt and a ₹20,000 personal loan. Start by paying off that credit card debt, which usually comes with higher interest rates. Your plan might be to allocate an extra ₹1,000 each month towards it.
Cut Expenses Like a Pro: Ditch the Guilty Pleasures
Now, we get it, Indian food is divine, and a little retail therapy never hurts anyone. But to conquer your unsecured debts, you might need to tighten the purse strings a bit. Look at your expenses and identify where you can cut back.
- Instead of ordering food every night, cook at home. You’ll save a ton and improve your culinary skills. Skip that new phone for now, and use the one you have. Remember, it’s a temporary sacrifice for a lifetime of financial freedom.
Negotiate Like a Boss: Dance with Your Creditors
Ever tried bargaining at a local bazaar? Apply that skill to your financial life. Contact your creditors and negotiate for better interest rates or a more flexible payment plan. They’re human, and they’d prefer getting their money back over nothing.
- Call up your credit card company and ask if they can lower your interest rate. Even a slight reduction can make a big difference in the long run.
Boost Your Credit Score: Pay Your Bills on Time
Your credit score is like your financial report card, and a good one opens doors to better loan rates and economic opportunities. Make it a priority to pay your bills on time.
- Set up reminders for your bill due dates or use auto-pay options to avoid late payments. This simple move can improve your creditworthiness.
The 36% DTI Rule: Why It Matters
Maintaining a Debt-to-Income Ratio (DTI) below 36% is a general guideline for a healthy financial profile. The rationale behind this is that you’re not overburdened with debt, leaving you with a healthy chunk of your income to cover living expenses and savings.
- If you earn ₹60,000 monthly and have debts of ₹20,000, your DTI is 33%. Lenders view this favourably, enhancing your chances of securing loans at competitive rates. A lower DTI makes you a more attractive borrower and signals responsible financial management.
Financial Wellness Apps: The Modern-Day Genie
We live in the age of smartphones and apps that make life easier. There are several financial wellness apps that can help you track your spending, and budget, and even save money. They’re like a modern-day genie granting your financial wishes.
- Try apps like ‘Freo Save’ or ‘Freo Credit Score’ to keep tabs on your expenses and savings. They’re user-friendly and can add a touch of fun to your financial journey.
Celebrate Small Victories: Pat Yourself on the Back
Remember, it’s not just about the destination; it’s the journey too. Celebrate your small wins along the way. Whether it’s paying off one credit card or hitting your first savings goal, treat yourself. But don’t overspend in the process!
- You’ve paid off that high-interest credit card debt? Great! Reward yourself with a movie night or a special dessert. It keeps you motivated and adds some joy to the process.
So there you have it, my financially fearless friends. Crush those unsecured debts, elevate your creditworthiness, and make your dreams come true. Your journey to financial freedom can be an adventure filled with lessons, challenges, and even a dash of humour. So, go on, conquer your Debt-Dragon, and let’s make your financial story legendary! 💰🏰