Drowning in Debt? Here are Some Tips to get Your Head Back Above Water
If you’ve recently taken a good hard look at your finances and realised that they’re not looking too good, you’re not alone. The average person has less than 3 months of their wages saved, and most people have enough to get by for just a month. That’s scary news if your business goes under or your boss starts laying people off.
If you’re committed to ending your credit card dependence and getting your finances back in the black, here are some tips so you can make it happen:
Pay yourself first
You may have heard this tip before, but it’s one worth repeating. Often we pay off our bills, pay some of our debt, plus our rent, food and other expenses, and realise that once again there’s nothing left to go into our savings account. The trick is to figure out how much you can afford to live on each month, and put the remainder in your savings account before you pay anyone else. So much money gets wasted on socialising, coffee, and shopping, you’ll barely notice a difference and can begin building a nest egg.
Make a budget
The key to paying off that debt and actually saving money is to make a budget and stick to it. If you have a goal in mind, and you’re saving for something specific, write it down at the top of a piece of paper, and then follow it up with all of the steps you’ll take to get there. Maybe that means only going out once a month instead of once a week, cutting up the credit cards (and consolidating the debt onto a low-rate card) or commuting to work instead of driving (saving money on gas and parking). Once you’ve thought of some good ways to save money and actually written them down, you’ll be committed to taking all of the steps necessary to reach your goals.
Ditch the fees
So many things have unnecessary fees, and once you realise what you’re paying (or wasting) it’s time to look for an alternative. This means speaking with your bank about a lower-interest credit card, switching gyms if you’re paying too much, and finding the best platform to send money online.
Often things we take for granted like transferring money overseas, sticking with our electric or gas company or paying our bills a certain way can be costing us more than we realise. Those small charges can quickly add up.
Get everyone on board
The best way to be successful at paying off debt is to get the whole household to join together. This may mean having a talk with your partner about your finances and explaining how important it is to you that you get out of debt, or educating the kids about why they can’t have a new toy. If approached the right way, you’ll probably find that the rest of the family is willing to help you meet your goals.