If you don't control your accounts, many financial problems can become real in your life. The big problem is that the lack of control can generate the snowball effect, when we have debt after more debt. In this context, a big doubt arises about how to get your name out of the red and start having new financial habits so you don't owe anything anymore.  

In the struggle to escape debt, Brazilians must resort to monthly financial planning. Without a doubt, this is the first step. From there, there are other actions that can enhance the cleaning of your name. For that, we created this article that will teach you how to get a name out of red. 

Stay tuned for steps to clear your name immediately!

As previously mentioned, the first step to sleeping peacefully without worrying about debt is to keep your planning up to date. However, we know how difficult it is to keep expenses at the same level, especially in Brazil, where products and services suffer constant readjustments. 

From the moment the debts accumulate, you need to remain calm and follow the following steps to efficiently get your name out of the red. Check it out!  

How is it possible to settle debts if you don't even know when you owe? Well, that's why the first step to understand how to get a name out of red is this one. 

This is the time to look at overdue bank slips, overdue card invoices and financing and put everything together in a single block, called debts. One of the biggest problems for Brazilians is not knowing how much money is leaving their account and this can cause many problems. 

To organize these points, you can use spreadsheets or even a notepad, as long as you really use it frequently. When writing down debts, name them, for example: credit card, IPVA, car letter, among other things. 

Some other interesting topics to include in your expense spreadsheet are:

That way, in addition to knowing when you're spending, you'll know where every bit of your salary is going at the beginning of the month.

Many debts that are acquired over time are not static. This means that the initial amount is not the same as what you will pay at the end of the payments.

This is standard behavior with loans, credit cards, home loans, car loans, and more. 

In this context, you cannot be guided by the initial contract value. If the initial loan was R$5 thousand, you will definitely pay more than that amount. Therefore, it is necessary to take note of how much interest you pay per month on each debt.

It is worth remembering that it is very important to prioritize debts with higher interest rates, such as overdraft and card revolving. These operations have the famous snowball effect, which causes interest charges in excess of 200% per year.

Another very good tip for a good payment plan is to replace one or more high-interest debts with others of the same amount, but with lower interest rates.

Check it out: instead of paying R$1500 on your credit card at interest of 10% per month, you can opt for a loan of the same amount, with monthly interest of 2% or 3%.

Have you already put all the debts in the spreadsheet? If so, great! Now is the time for us to carry out the balance between inputs and outputs of values in your account.

In order to have a general idea of your financial situation, it is not only necessary to know what is pending, but also how much you earn against your monthly expenses. That is, all fixed and variable earnings must be present in the worksheet as well. 

If you owe less than you earn, then the scenario isn't too bad. In that case, it's important to analyze how much is left of your salary. 

However, if you find yourself in the situation where your expenses exceed your income, you need to urgently take a plan of action. This is the time to cut as much spending as possible so that you can start getting your name out of the red. 

Remember the action plan? So this is where we are going to detail a little more about this subject. Creating a payment plan is the next step in understanding how to get your name out of the red. 

At this point, it's interesting that you create a list of debt priorities. The one with the least remaining term or smaller amounts, according to your priority, can come first in payments.

According to some experts, you can use the interest rate criterion to make a list of priorities for each expense. It is worth mentioning that this way of organizing is very efficient for those who have accumulated card debts.

Understand that if you have a debt of R$1 thousand that charges 10% per month (on the initial amount), in one year it will double in value. On the other hand, if a second installment charges an interest rate of 3%, it will not increase as much as the first installment. 

Therefore, it is more interesting to pay those creditors who charge higher interest rates and only after that, pay the lower rates. 

We know that it is best to catch up on all the amounts, but there are cases in which your financial reality does not support that amount of payments. At this time, the recommendation is to negotiate your expenses. 

With the list of expenses ready, analyze which loan, financing or card will accumulate the most value in the long term and if you have the capacity to pay it. In cases where there is no other way out, it is interesting to resort to negotiation.

To do this, keep an eye on the platforms that offer the renegotiation of amounts owed:

Remember that the interesting thing is to talk to the creditor and thus reach a negotiation within your conditions. This way you will be able to afford the debt payments until discharge. Even because agreements outside your reality will not solve anything.

Negotiating your debts, update your financial planning according to the new installments or other conditions you established in the negotiation.

In cases where the interest is too high and you could pay off the debt if that rate were lower, it is possible to apply for credit portability. In summary, portability is practically an exchange of a debt between credit operators. 

In this operation, you find a company that fully assumes your debt and you assume a new commitment with this new company. This new payment commitment must present better interest rates or payment conditions than the previous ones, otherwise it would not be advantageous.

Did you like it? To learn more, check out our recommended content and see 8 tips to get out of the red once and for all.