Giving your financial situation a 180-degree turn doesn’t happen overnight. It requires 100% commitment, planning, and self-discipline.
From your bad spending habits to owning a high-interest credit card debt, you may never realize how much money you are putting away, and eventually, you will feel overwhelmed about the debt you are in right now.
Now, the question is how to get away from it the better way? Here are five strategies for paying off your debt and getting away from it immediately.
- Stop borrowing more money.
We may have encountered a situation wherein you borrow money to settle your other debt. So take the most important and hardest step first – stop borrowing money from loansharks, don’t swipe your credit cards so you won’t make new debt.
To solve this step, you must know the importance of the true cost of swiping a credit card and taking out new loans.
- Create a budget and stick with it!
Budgeting may be boring, but this is a great way to make use of your money wisely. You may opt to use financial budgeting apps or software that you can utilize to create a budget, or you may opt to create one with a notepad and a pen.
Start with writing down how much money you have and include income from your job, side hustles, and other sources of income.
Also, write down all your recurring and fixed expenses such as rent or mortgage, utility bills, insurance, minimum credit card payments, and groceries.
Next, check if there’s enough room in your budget and keep an eye on where you can cut back your expenses, such as grocery list, streaming services, carpool, or your new cellphone plan. You may also check with your unnecessary expenses that you can easily cut off without affecting so much on your day-to-day life.
- Pay more the minimum payment
If you want to get out of your debt fast, you should learn how to settle your dues earlier and settle higher than your minimum payment.
When you set up your initial budget, prioritize your recurring payments and your debts each month. That way, you can create more opportunities to add more to help you reach your goals faster.
- Seek professional help
Sometimes, creating a DIY budget to become more financially literate can be overwhelming, and it seems like you’re just going through the same routine.
By having a qualified financial coach, you’ll have an accountability partner and develop a better spending habit soon enough. This way, you’ll also be able to shoo away annoying debt collectors who keep bugging you from time to time. But if your credit is really in a very bad shape right now and you have no financial coach yet, here are a few tips for you. Hope this somehow helps you to avoid a more stressful situation that your debt brings you.
Being in too much debt does not only affect your credit score negatively, but it also negatively affects the quality of your life in general. As the newly crowned Miss Universe 2021, Harnaaz Sandhu said about climate change – “it’s better to prevent and protect, than repent and repair.” It’s also true when it comes to debts.