Posted on Sunday 11 December 2016
Debt can feel overwhelming, but with the right planning and consistency you will be able to get on top of it.
Gaining financial freedom is a very worthwhile goal, and the quickest way to do that is to get yourself in the green. Becoming debt-free can take time, but is actually a more simple process than you may think.
Here are our top tips to pay off your debts faster and take that financial burden off your shoulders. Please note we are not financial analyst so take all our tips on this article and on our website with a grain of salt. We are not giving any legal advice and simply just sharing tips that may or may not work for you.
Give up the credit card
While a credit card has it’s advantages (Such as building credit or keeping automatic payments secure), relying on credit cards can be a slippery slope toward debt. In fact, it's one of the best way to get in debt and stay in debt. One or two credit cards may be a necessity but not any more than that.
The temptation to live above your means creates a cycle of overspending, then catching up with repayments. You should only be spending on credit what you can then pay off in full each month.
Take advantage of bonuses
It’s tempting to splash out when you get that bonus from work. After all, you earned it! However putting that chunk of cash straight towards paying off your debt is a great way to get ahead, at least meanwhile.
Any progress you can make towards being debt-free will save you money in the long term, which is kind of it’s own bonus. So always go for credit cars for deals where you can get something back as well. It's always fun to get credits, rewards and things of that nature that you can
Stay on top of daily spending
You probably have at least a rough idea of a personal budget, but it may shock you how even small daily spendings can start to add up. Knowing where all your money is going is an important step in taking back financial control. This way you are not just keeping everything in control but you are slowly programming your mind that it is you who is running the show. Not the other way around. Lots of people get carried away when it comes to handling money so once you flip the switch on it, you will feel incredibly empowered.
Focus on the biggest debt first
The bigger the debt, the larger the impact it will have on your credit score. This is where a financial advisor can help you consolidate your debts and suggest which ones to pay off sooner rather than later. However, this really depends on the person. If you like taking small steps, get rid of the smaller debt first. This will give you more confidence and then you can work your way up. If you are the type of person who likes to tackle the bigger problem first, then get rid of the bigger debt first. Either way, find the method that works for you and start getting at it one bit at a time.
Aim to pay off more than the minimum
While it isn’t always possible, paying off more than the minimum balance is crucial to getting out of debt faster.
The interest and fees will add up over time, meaning your total debt amount will keep increasing (or at least not decrease particularly fast) if you don’t take strong and decisive action. So whenever you get a chance, always plan to pay off the minimum. This way you will get rid of your debt in no time.
Stay clear of temptation
There is no other way to put it-saving can be boring. After many months of sensible spending and sticking to a budget, you are more likely to make a blowout splurge purchase.
While of course you should not be depriving yourself of life’s joys, staying clear or tempting online shopping sites or retail districts will help push the thought from your mind. You could even refrain from storing any payment details online-the harder it is to make an impulse purchase, the better.
The key to getting out of debt this year is consistency. You have the plan, now you just need to stick to it! There is a light at the end of the tunnel, and imagining your debt-free future should be a daily inspiration.
Remember, every step of the way is a stepping stone. Also maybe getting in debt will lead you to something incredible that you never considered. Everyone is going through there own unique journey so try your best, don't be so hard on yourself and eventually you'll not only get past debt, but pretty much everything else.