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Pendulum receives a satisfactory rating from Standard & Poor’s in 2013
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Pendulum receives 2013 HR Rating
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Pendulum trains its staff in financial matters.
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Our legal team consolidates its position by signing new contracts.
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Pendulum joins efforts to increase its social work activities.
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We implemented a new Customer Service Department
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The Pendulum Team brings Christmas to a boarding school with La Familia Peluche.
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We opened a new office in the State of Mexico
Keep in mind that all the money we use to pay off our loans, is money we could be using to fulfill other financial goals. This is to say, debts subtract our disposable income.
It is important to take a moment to stop and think: What would we do if we did not have these debts? What other life goals could we accomplish with all that extra disposable income?
Nonetheless, as in any other aspect related to our Personal Finances, getting out of debt is not hard, but it does take time. It requires a certain amount of planning and discipline to apply the method.
METHODOLOGY
Any plan to get out of debt implies that you must be able to pay at least the minimum monthly amount due on all loans, plus a little extra. If you truly cannot do this, then you need to take additional measures we will discuss later on.
Meanwhile, here are the steps to follow:
1. Recognize and face the problem
The first step in solving any problem is recognizing it. You need to gather all of your latest credit card statements and add the balances to see your total debt amount. This will help you size the problem and give you a complete picture of your situation.
2. Hide all of your cards
Our goal is to get out of debt. Therefore, we must avoid using our cards, at all costs, to keep from increasing our debt. Do not carry your card with you. Put them away to make sure they aren't handy. It is better to keep them in a safe place, to avoid any temptation, and get used to paying everything with cash for the moment.
3. Prepare an action plan
You must first write the total amount of your monthly net income (that is, after taxes) on a sheet of paper. Then write down your fixed expenses, such as your rent or mortgage payment, phone bill, gas, electricity, tuition, cable TV, etc.
Now you need to calculate your other expenses, based on receipts, such as groceries, transportation, etc.
This will help you decide where you can cut costs (for example, cable TV, or on your mobile phone or land-line, among others, if you have a very serious problem and must cut everything that is not essential to live). It is important to note that in order to resolve our problem as soon as possible, we must allocate as much money as possible to pay our debts.
Finally, you must subtract your expenses from your income to see how much you can allocate to your creditors. This amount should be enough to cover the minimum payment on all your cards, plus an additional amount. Otherwise, it is clear that we live beyond our means and must remedy this situation as soon as possible to prevent further problems.
4. List and put your debts in order
We have to make a list of what we owe on our credit cards, as follows: Card Name, Total Balance (Debt), Interest Rate, Minimum Payment and Payment Date, and we must put them in order. We can use two main approaches to this end:
• The optimal psychological approach, sort your debts based on the interest rate you pay, from the lowest to the highest. This is, list the card with the lowest debt first, and so on. This approach allows us to free ourselves of the small debts first, thereby motivating us to reduce our list of debts sooner.
Although this is not the best solution in financial terms, as my readers know, I am convinced of the power psychology plays in our financial information, so I know it is a strategy that could work better for some people.
5. And now, it's time to pay
We must pay the minimum amount due on all of our credits to avoid delinquency, and the entire extra amount that we have earmarked to pay off our debts, must be fully allocated to the first debt on our list, depending on our selected approach. Once we eliminate this one, we follow with the next one and so on, until we pay them off in full.
What happens if we don't have enough to pay our minimum amount due and a little extra?
In this case, we have a very serious problem, which usually requires drastic measures. You can take the following steps, in these cases, in order to implement the plan described above:• See if you can get some extra money. If you have savings, you might need to use them to pay a portion of your loans, as the interest rate on these is much higher than the amount you can get elsewhere for your investments. Or you could also get a second job as an additional source of income.
• As a last resort, you might want to try to get a loan from a family member or from your job to help you pay off the debts you owe financial institutions, and keep only one loan with a much lower interest rate. It is important to note that debt consolidation does not solve our fundamental problem, and certainly does not correct the habits that led us to that situation.
• Try to negotiate with our creditors. Non-performing loans are serious problems for banks, so most are open to constructive dialogue in an effort to find a solution for both parties. If not, the National Commission for the Protection of Users of Financial Services (CONDUSEF) can support you this negotiation with the banks.
You must be very proactive and tell them how much you can pay, and even bring your plan on how to pay off your debt. Many banks accept refinancing your debt at a lower interest rate than they normally apply to credit cards and may even consider giving you a discount if you pay off the loan in one single installment.
