Many Brazilians start the year in debt and need help to get out of the red, but most have no idea how to start dealing with this situation and resolving their financial issues.

It is this lack of understanding that leads many people to despair, since most of them let outstanding debts accumulate, as well as the interest charged.

If this is your case, don't worry: know that with a good financial plan, it is possible to get rid of debt.

Therefore, in this post we will list a series of tips for those who want to end their debts once and for all and, thus, get even closer to financial freedom.

So, read on and check it out!

If you have financial issues that are giving you a headache, we have tips that can help you solve this problem.

Keep reading and check out the step-by-step guide we’ve put together. Let’s go!

The first step to paying off your debts is to analyze them and understand everything behind them.

Knowing the size of your debt is important for two reasons: it prevents it from snowballing and it helps you prioritize which bill to pay first (in the case of those who have more than one debt).

The main information you need to have visibility into is:

It is extremely important to understand your financial situation. Therefore, it is essential to list all the debts you have, no matter how small.

Also, don’t forget to write down all your expenses as well. That way, you’ll know exactly where your money is going. 

It is also essential to know exactly how much you owe, how long you have owed it, and who you owe it to. This is essential because it will help you determine which debts need to be paid off first.

It may seem like a silly tip, but with a goal in mind, it will be much easier to separate priority debts and create strategies, such as paying the most expensive bills in the first half of the year.

Know that setting goals will increase your focus on paying off your debts, you will know if you are on the right track or not, you will improve your performance, increase your productivity, etc. Therefore, be sure to set them.

Many people get into debt not only because they spend more than they earn, but they also don't realize how harmful these expenses can be, since these cuts could help keep the budget balanced.

Making these cuts a habit will increase your chances of having money left over at the end of the month to help pay off your debts.

Although cutting back on these expenses may seem like you have to give up on little pleasures, in practice that’s not how it works. Often, cooking something at home, in addition to helping you save money, can be healthier for you.

Another tip is to cut subscription plans for services you barely use, as these fees may represent an amount you wish you had at the end of the year.

Often, cutting back is not enough. That's why finding extra income is one of the most important strategies for those looking for a way to get out of debt.

There are several ways to do this: working as a driver or delivery person for apps, among other jobs. You can also turn your hobby into a professional one.

Another way is to sell some items from your home that you don't need, such as clothes, shoes, etc. Another alternative is to create products, such as cakes, crafts, sweets and sell them to friends, family or on the internet.

This is a very important tip, as it will be directly linked to the next topic.

This is a very valuable tip: contact your creditors and, if necessary, propose a renegotiation of the outstanding amounts. Know that, just as you are interested in paying, your creditors also want to receive.

That's where the previous topic relates to this one: renegotiating your debt and getting a discount will be much more possible if you have some cash on hand.

But how am I going to renegotiate my debts?

Renegotiation can be done directly with the creditor, either at fairs to clear the name or through debt refinancing and portability from one institution to another. 

The most important tip is to look for official channels of the financial agent where the loan was contracted. One positive point is that, in most cases, it is possible to make the renegotiation request completely online, in addition to carrying out simulations of the new loan conditions.

Before renegotiating, however, it is important to try to understand the situation in which you are inserted and what will be the best way to do it. This is because not paying the debt renegotiated with the creditor can be even worse for you. Be careful!

All of these guidelines for renegotiating your debts are essential for you to be able to successfully renegotiate your debts with your creditors and pay the lowest possible amounts.

Furthermore, it is also essential that you know how much you will have available each month to pay your bills. To make things easier, we suggest that, if you don't already use a financial control app or spreadsheet, you start using it right now.

From there, knowing how much you can set aside each month to pay off your debts, it becomes much easier to renegotiate and get better conditions.

Viewing your debts with the highest interest rates is much easier if you have everything organized, as recommended in the first topic of the text.

Paying off debts with higher interest rates will prevent everything from snowballing, so if you are in debt on your overdraft or credit card, prioritize paying off these debts.

Depending on the situation, a loan with competitive rates may be worth it to pay off these debts.

To pay off your debts, controlling your finances is essential. A big problem for Brazilians is spending more than they earn every month and not even realizing what is causing this problem.

To solve this problem, it is important to record all the income and expenses in your household budget. This way, you can find out how much money you are spending and also in which categories your main expenses fall.

So, keep track of everything you spend. Including that coffee you drink every day after lunch. You can keep track of your expenses using any tool you prefer, from a smartphone app to a simple Excel spreadsheet or even a notepad.

Many people may feel uncomfortable talking to their family about this topic, but remember: two or more heads are better than one.

So don’t hesitate: get your family involved. This will make it much easier to pay off your debts and achieve financial freedom. It’s essential that everyone in the household works together to help keep spending under control.

Make sure family members know the real financial situation of the household and which costs need to be cut in the budget, so be transparent. 

Remember that changing habits becomes much easier when household members share the same goal: working to get their finances in order.

Researching an item in more depth and not buying the first option that appears can help you a lot when it comes to paying off your debts.

This is because many people, when searching for a certain item, buy the first option that appears, without evaluating the others. This can result in purchasing products that are more expensive than normal.

To make things easier, you can download several applications or extensions from the internet that, in addition to monitoring prices and telling you whether it is worth making a purchase at that time, can also show you the price history of the products you are interested in, thus avoiding scams on Black Friday, for example.

But don't be fooled: this tip doesn't just apply to online shopping, but to physical stores as well. Another complementary tip is: keep an eye out for promotions, discount coupons and loyalty programs.

Another tip: whenever possible, buy using cash. That way, you can ask for an extra discount, because you won't be using the seller's credit card machine.

Although it may seem obvious, many people focus completely on paying off their existing debts, but end up creating new ones in return.

This is another topic that is easier to fulfill if you have your finances organized, because, through organization and control of income and expenses, you avoid spending more than you earn.

Furthermore, organizing your finances will help you understand your financial reality and, most importantly, adapt to it. This is an important part of the process of managing money healthily.

This may seem boring, or even tedious, but know that increasing your knowledge about financial education will not only help you pay off your current debts but also avoid them in the future.

For this, there are several free courses of extreme quality spread out there on the internet, so there are no excuses to start.

Another important step to getting out of debt and avoiding it in the future is to create an emergency fund. Experts recommend that the fund should be the amount you need to support yourself for six months.

This money saved is intended for emergencies, as the name implies, and prevents you from having to resort to expensive sources of credit, such as a card and overdraft, in times of desperation.

Even though we said earlier that you should keep an eye out for discounts, that doesn't mean you should buy any product you see on sale.

This will result in unnecessary purchases, so whenever you really need a product, keep an eye out for promotions for it.

To find out if you really need a certain product, there is a trick: leave the store and, if the following week you still need the product, reconsider the purchase. This trick can also help you avoid impulse or emotional purchases. 

Often, even though we are broke or in debt, we don't have the courage to say "no" to a request, for fear of looking like a tightwad.

Learning to say “no” is extremely necessary to help you have some money left over at the end of the month to pay off debts or avoid financial hardship.

And let's face it, it's better to look like a tightwad than to see that debt with very high interest rates turn into a snowball, so know how to say no.

Never lend your name. If everyone knew how bad this can be, both for their financial life and for their social life (relationships with their family and friends), they would never do it.

Lending your name can make your debt situation even worse, so if someone asks you for your credit card to make some purchases, you can put the previous topic into practice or go shopping with that person and pay at the checkout. 

Credit cards are one of the main causes of bad debt among Brazilians, so be careful: you need to be an ally of your budget, not a villain. 

So, check the real need for each card in your financial routine, because the greater the number of cards, the greater the chances of purchases getting out of control and the debt becoming a snowball.

Getting out of debt requires a lot of focus and discipline, so always try to resist the invitation to happy hour after work or to see your favorite band in concert, as this momentary pleasure can represent a huge headache in the future. Therefore, limit your spending on entertainment.

But that doesn’t mean you should give up your social life, as it’s perfectly possible to achieve a balance by setting a spending limit for each event. Plus, there are plenty of free or low-cost activities you can do.

Another golden tip for getting out of debt and avoiding it in the future is to reflect. Stop and think: what happened to make you end up in this situation? This is essential to avoid more debt in the future and to know how to get out of the problem as soon as possible. Remember: be honest with yourself.

If the answer to the above question is that you are a compulsive buyer, it may be necessary to seek help and act on the root of the problem, trying to change your behavior. This way, it will be easier to avoid getting into debt again.

Many people don't stop to think about the real reason for being in debt. It's no wonder that many people manage to pay what they owe, but soon after, they get into debt again.

This happens because they return to old harmful habits, trying to maintain a routine that is not compatible with their income.

Depending on the value and amount of your debts, the process of paying them off may not be as quick and easy, however, know that it is entirely possible to eliminate all your debts and achieve financial peace of mind in a shorter period of time than you imagine.

To achieve this feat, discipline and planning will be necessary, as previously mentioned.

First, you need to control your finances with dedication and responsibility: write down all your income and expenses, create a budget, set spending limits and see how much you can allocate each month to pay overdue bills.

Then, seek out your creditors and negotiate the amounts owed. With cash in hand, this renegotiation may be more feasible and even more advantageous. To do this, you may need an extra source of income and/or a cut in expenses.

Afterwards, simply make the payments every month and don't hesitate to get into debt again. To do this, do the self-assessment mentioned above and don't forget to deepen your financial knowledge.

By doing this and following our other guidelines for each topic in the article, you will not only get out of debt quickly but you will also start building your financial independence.

Many people believe that it is not possible to pay off their debts with little income, but this is not true.

Know that it is completely possible to get out of debt even with a lower income. Of course, the process may be more difficult or time-consuming depending on each case, but the important thing is to stay focused and not give up.

It can be said that all (or at least most) of the points we have covered here in the content are also valid for those who “earn little”. Just adjust the calculations in proportion to your earnings.

We emphasize again: if you do not change your mindset regarding spending, you may end up sinking into debt again. Therefore, remember that these habits must be maintained consistently, even after renegotiating. 

Additionally, if you want to know how to calculate the interest on your debts, access the recommended content below and check out the process!