Debt suffocates .. How to get rid of them?

Mohammed Afzaz - Al Jazeera Net

In today's world there is hardly a country that is not heavily indebted, a company that has not resorted to banks, a family that has not experienced a deficit in its budget, or an individual who has not entered into borrowing.

Some experts see debt as "not all evil." Some may impose it on necessary needs, but the bad thing is to direct these loans to non-essentials, and one enters into a spiral of indebtedness that he can not escape. How do we manage the loan portfolio? When will we get rid of debt?

Types of debt

Financial analyst Nidal Khouli said in an interview with Al Jazeera Net that some of the debts are for "essential" items, and others are for accessories.

"The problem starts when the individual borrows just to get more luxury, or to rush to get luxury goods and services, such as traveling business class to a distant destination, changing home furniture, and arranging a wedding over his ability," he says. Finance.

Nidal Khouli believes that borrowing for such purposes is "a crime in his own right." Some people start their lives with debt only to keep up with social norms.

"There is no positive debt, but all the debt is negative, even if it is in order to eliminate the necessary interests," says banking expert Amr al-Sayyed.

The economic adviser to a number of companies, Abdul Rahim al-Hoor, says that the beginning of the disposal of debt depends on the strong will to do so, and says "the will of the lady of life."

Experts advise to distribute spending correctly in basics and luxuries and set up fixed monthly amounts (Reuters)

Stop borrowing?
According to banking expert Amr El Sayed, the first steps towards better management of the loan portfolio and the gradual elimination of debt are:

1. Ask yourself: Why do you have debts? If you know why you are borrowing, your way to getting rid of them will be easy.

2 - Stop borrowing again, do not create more debt, so that they owe to pay old debts or debts to be settled, and made a conscious decision to stop borrowing more money.

3. Limit your budget. The budget is issued and returned (income and expenses). You must accurately determine the amount of income you expect and the amount of expenses you wish to pay.

4 - Choose one loan and start paying it first, you must put a clear plan to repay your debts, such as choose the oldest loan in your debt and start to repay until you reach the last debt on you, and in this way also will have credibility in payment.

5 - Think about how to earn more money.

Stay away from luxuries
Financial analyst Nidal al-Khouli says that if a person has a loan, he should follow the following steps:

1 - correct your social behavior to stop bleeding: you have to stay away from spending money in luxuries as much as you can, such as to decide to reduce the level of spending on luxuries to a minimum within a year or two, and away from excessive.

2 - Modify the sources of income: Try to get new sources of income, such as you benefit from the margin of the void in the completion of businesses that give you additional inputs, according to your skills and your circumstances (e-commerce, home projects ...).

3. Your debt schedule: Loans are combined into a single loan and away from expensive borrowing, such as using a "credit card" for 25% annual interest, so as not to add a quarter of new debt to old debt.

Look for a new income
The economic adviser Abdul Rahim Al-Hor says in an interview with Al-Jazeera Net that the basis in the process of debt management is the search for additional income to meet the budget deficit, and advises:

4 - Debt inventory: You have to limit the debts and installments and set a timetable for disposal in accordance with priorities.

5 - inventory all revenue: You must accurately determine the cash flows received, salary and overtime if any and others.

6 - Define the objects of expenditure (control of spending): the distribution of spending correctly between the fundamentals and luxuries, and the establishment of fixed monthly amounts for each object of expenditure, and abide by and not exceed them under any circumstances, so that you can finally know whether you have a deficit or surplus.

7. INCREASE INCOME: If there is a budget deficit you have to search for other income by doing additional work in the spare time.

America, Japan and Britain are the world's biggest debtors (Reuters)

Function Numbers:
- International debt jumped to a record high of $ 233 trillion ($ 233 billion) in the third quarter of 2017. These figures include the total debt of households, governments, financial institutions and non-financial institutions.

Government debt is $ 63 trillion, while non-financial companies' debt is $ 68 trillion.

- Every person in the world has a total debt of more than 30 thousand dollars in light of the United Nations estimates of the world population of about 7.6 billion.

The United States is the world's largest city with more than $ 20 trillion, Japan ($ 11 trillion) and Britain ($ 8 trillion).