If you are struggling to make ends meet and keep drowning in debt, you are not alone! Latest analysis show that the average UK debt is an estimated £8,000 per person. But you don’t have to keep wallowing in much debt when there are methods you can adopt to enable you pay it off quicker than you can imagine.
Here are 10 of those tips to guide you:
1.Prepare a budget: This is the first step to freedom from debts. Calculate what you owe and map out a budget that will enable you to figure out your total expenditure over time, what to skip and where to cut costs. Failure to do this will sink you into deeper debts and stall your freedom from it. There are also several online tools or even handwritten diaries to help you form a budgeting plan.
2. Settle the highest of your debts first: Sort the interest rates of your credit cards from highest to lowest, then handle the card with the highest rate first. Once you start paying off debts of the credit card with the highest annual percentage rate, it becomes a lot easier for you to make minimum payment on the rest of your credit cards.
3. Make payments above the minimum balance: Endeavor to pay more than the required minimum balance required on your credit card statements each month. If possible, make it weekly. That way, you will be making a significant dent in your debts and all will be paid off much faster.
4. Exploit non interest balance transfers:. Save more on interests by moving your debts to a zero – interest balance transfer card if you have one. But it’s advisable to pay off the debt before the balance transfer expires, else you may be hit with higher interest rates.
5. Dump your credit cards for now: Until you have a hold on your finances, dump your credit cards at home. It doesn’t matter if you get discounts or earn cash using them. This is very important if you are to stop piling up debts.
6. Channel all cash gifts and bonuses towards debt: If you get a raise at work, extra sales commission, holiday bonuses or cash gifts, offset your debt with it. Do not be tempted by luxury or the good life until they are settled. What’s the point of taking a vacation when you have debts up to your neck? Remember to be responsible!
7. Remove all your credit card details from online stores: Storing your credit card details with online stores you shop with frequently is great and makes things like the checking out process and change of items easier. But in a case where you’re trying to pay off debts, do not use credit cards. Use a debit card issued by a renowned financial service that is linked to your checking account instead. It helps you from overspending.
8. Sell of unwanted/unused gifts and household items: Look around your household for those gifts lying around unused or in the attic/storage going to waste. Most were probably unwanted gifts at weddings, birthdays, Christmases etc, but they could easily be of value to others. Find out how much they are worth, take great pictures of them, make eye popping ads and put them on Craigslist or eBay. The money goes a long way in paying off debts.
9. Rebrand your lifestyle: Most of the debts people accumulate are due to the fact that they can’t separate their needs from wants. The things you consume on a daily basis and other frivolities you spend money on, are they really necessary? If you can clean and cook, why pay for help? If you can resize an old shirt, why purchase a new one?
10. Celebrate every debt payoff goal you meet: Reward yourself whenever you meet a debt payment goal. Do not go overboard and incur more debt in the process. A large pizza, fancy wine, ice-cream or a weekend camping trip (instead of an expensive vacation) will do.
With all these outlined steps duly followed, you’ll be on your way to debt freedom faster than you can imagine.
