Tips to pay debts in dollars in the midst of historical increases

In this season, the price of the dollar has presented a substantial rise throughout the world, which has meant the depreciation of most currencies in Latin America. For example, in Colombia, the US currency reached above $4,600 and, although it has lost ground in recent days, it is still close to $4,300.

The foregoing has brought about debts in dollars increase significantly for Colombians.

(Would a rise in the dollar lead to an increase in interest rates?).

Therefore, in these moments of high volatility of the foreign currency, experts recommend having a financial planning to start paying the debts that have been acquired in dollars, and thus not exceed the debt capacity.

According to Camilo Quiñones, Country Manager Solve your Debt Colombia, they must arrange debts from smallest to largest. “We suggest always choosing the smallest debt to be settled and paying a little more than the minimum amount each month. Thus, when you are safe and sound, you can invest that money in a next debt“, he pointed.

And if you have several debts, Quiñones’s advice is to concentrate your efforts to settle, in the first instance, the one with the highest interest rate, to finish paying as soon as possible and save a little money.

(The businesses that move around the dollar in the country).

In this sense, for the expert, they should “attack” in the first instance those debts that are easier to settlewith this “the intention is to end part of the commitments and that amount can be used to pay other debts.”

– Prepare a budget that clearly identifies the income and expenses for the entire month.

– Cut costs by eliminating those things that are not necessary. For example, the purchase of coffee that is made every morning

– Try to have only one loan at a time. If a credit was requested for a computer, and now a refrigerator is needed, the first one must be paid off before requesting another.

– Find ways to increase income. Start a business, work as a freelancer or on the weekend, sell things you don’t need.

(Tips for investing in the US amid dollar volatility).

Taking out a loan is part of adult life, and it can be a great way to start building wealth. However, according to Quiñones, doing it the wrong way can be counterproductive to maintaining healthy finances.

“The negative is being over-indebted”, according to the expert. That is, having one or more debts and not being able to pay them. What causes that, due to the interests that are generated monthly for the non-payment, the amount that is owed continues to grow.

In other words, a healthy debt is when you have the ability to pay to face it, while a negative one is when you do not have it.

In the case of debts in dollars, Quiñones said that one must be careful when investing, spending or buying, since if one is not aware of the implications (increases, interest, losses, falls, etc.) it can harm the finances. personal.

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