Being free from debts lets you live your life without any worries. You can make your savings grow and allocate the budget you need for the things you want to have, a new house, car, and travel opportunities. Freeing yourself from your debts all comes down to good management. Here are some debt management tips that can help you out:
1. List down your expenses.
Knowing how much you owe is not enough; you have to watch how much you are spending. Keeping track of your expenses lets you know whether you are making progress in reducing your debt or not. If reducing your primary expenses is not feasible, try focusing on your small expenses and see how much they add up to your overall expenses. In most cases, you will find that these expenses are not that important, which make it hard for you to pay up your debts.
2. Avoid impulse buying.
You can be susceptible to impulse buying. A simple visit to your favorite store may end up with an unnecessary expensive purchase. Hence, avoid temptation in the first place. Avoid places where you would usually feel that unreasonable urge to buy something. It can be an electronics store where you would be tempted to buy the latest cool gadgets you probably don’t need or that fashion store that has all the accessories that go with the current trends.
3. Choose a debt payment plan that suits you.
This can help you organize your payments. Some suggest paying off debts with the highest interest since it can help take off the mental pressure while others suggest settling smaller balances mainly for motivation. The choice is yours.
4. Be a bargain hunter.
While paying off your debts, it would help you if you would shop for bargains. It lets you get the items you need at a cheaper price. Also, be on the lookout for discount coupons; establishments usually offer them during peak season. Even though buying foods in bulk helps get discounts, it won’t help you save up money. Since buying in bulk means getting things that you won’t be eating for several days and even a few weeks. Stick to buying food items that you will be eating for the next few days.
5. Prioritize your savings.
It is recommended that you take at least six percent of your income and put it in your savings. Putting your money in your savings account not only prepares you for emergency expenses but also lets you earn money in savings interest. This may seem like a simple tip but only a few people actually do this.
6. Choose cash over the debit card.
Most people prefer to pay with their debit cards simply because you won’t have to go to the bank to withdraw money you will need or write checks. However, paying with debit cards (and also credit cards) make it hard for you to limit your purchase. Paying with cash, on the other hand, lets you see, first hand, how much money you are letting go. This makes it easy to do some cash limiting and increase your savings.
Keep these tips in mind when managing your debts and expenses. You might want to refer to this guide every now and then to make sure you don’t miss anything. Following these tips will help boost your savings and make it easy for you to gradually get rid of your debts.
I’ve found that when paying off debt, consistency is key. I made payments every week to develop the habit and maintain my momentum. Every little bit counts. Thanks for the great article.
Found this blog in my search for debt problems. Sad to say between my own lack of discipline (impulse buying) and $8000 of loans to my sister, that I will, pretty much guaranteed, never see again, I have accumulated a whopping $16 200 in credit card debt.
I also have about $8000 owing on my vehicle which, due to fairly large bi-weekly payments, will be paid off in less than a year and a half maximum.
Fortunately the highest interest rate I am paying, at this time, is 7.2 % on about $6000 of the CC debt.
Hope to have the entire 24 200 paid off in 18 months. If will be tough, and, cut backs in almost every area will have to happen, but, it can be done. I have already unscribed from every shopping email notification. The “too good to pass up deals” that tempted me over the last two years.
Anyways, enjoying this, and a few other, financial blogs that are helping to set me on the right track.