Pay more! But, how can we pay more if our income doesn't increase
Posted: Mon Jan 20, 2025 10:05 am
Have you noticed that the usual methods used by most people to pay off debt are ineffective ... or at least less effective. This common method, we call it the conventional method . In this conventional approach, the focus is usually on paying off debt according to the repayment schedule provided and often we only pay the minimum rate. Let's take credit card debt for example. Every month we only have to pay a minimum amount (minimum payment) and we are considered safe for that month. credit card debt payment techniques If we read books related to financial management, one of the pieces of advice we often read is don't just pay the minimum amount .
and to make matters worse, we still have to use the same card to cover our insufficient overseas chinese phone number data expenses. That's why I say, the conventional way of solving debt problems, namely paying according to a schedule, or paying the minimum amount, is less effective in helping us get out of debt. Do you want to know why it is less effective? This is why (1) High interest rate In most debt systems, for every debt we incur, we have to pay the principal amount along with interest .
There is no such thing as borrowing RM10,000 and paying back RM10,000 unless we borrow from relatives or friends. But if we borrow from a bank, then we need to be prepared to pay it back with interest. One of the biggest challenges in repaying debt is the high interest rates that accrue on the unpaid balance. It's even worse when you only make the minimum monthly payment. The majority of your payments go toward paying interest, not the principal balance. For this reason, you will find that the time it takes to pay off all your debts is long and the total amount paid exceeds the original amount borrowed.
and to make matters worse, we still have to use the same card to cover our insufficient overseas chinese phone number data expenses. That's why I say, the conventional way of solving debt problems, namely paying according to a schedule, or paying the minimum amount, is less effective in helping us get out of debt. Do you want to know why it is less effective? This is why (1) High interest rate In most debt systems, for every debt we incur, we have to pay the principal amount along with interest .
There is no such thing as borrowing RM10,000 and paying back RM10,000 unless we borrow from relatives or friends. But if we borrow from a bank, then we need to be prepared to pay it back with interest. One of the biggest challenges in repaying debt is the high interest rates that accrue on the unpaid balance. It's even worse when you only make the minimum monthly payment. The majority of your payments go toward paying interest, not the principal balance. For this reason, you will find that the time it takes to pay off all your debts is long and the total amount paid exceeds the original amount borrowed.