Do you have mounting debts that are running away from you? Do you feel as though you have lost control over your personal finances? Well, you’re not alone. Around one in six people struggle with debt and have a problem with it. But there are ways out of debt if you know how to tackle it.
In this article, we’ll look at debt and the steps that you can take to minimize or completely remove it from your life. We’ll provide some practical tips for handling your finances and some habit changing tips that will change the way that you handle money.
Read on for how to banish debt from your life for good.
Stop Ignoring Your Bank Statements And Bills
If you are someone that squirrels away unopened bank statements and credit cards, then you will no doubt have problems with your finances.
Burying your head in the sand and trying to ignore the problem is a common response from people who experience debt in their lives. But it is not a solution. In fact, it can only make matters much worse.
Stop ignoring your bank statements and bills. They may not have good news in them, but at least if you know exactly what you are up against in terms of your debt, then you’ll be better able to fix it.
Admit That You Have A Problem With Your Finances
Ignoring your finances won’t get you anywhere; you need to admit that you have a problem managing them if you are to ever manage to fix them.
Admit that you have a problem with your finances and that they have become unmanageable. If you can admit this, then you will be able to reach out and get the help that you need with your finances.
Get In Touch With A Debt Charity
Once you have admitted that you have a problem with your finances, you should get in touch with a debt charity and seek their advice. Many debt charities offer a free service. They may be able to sit down with you and go through your personal finances and help you to formulate a plan to get out of debt.
Go Through Your Debts And Make Priorities
Not all debts are equal; some are a bigger problem than others. You should start off by going through your existing debt and seeing which debts should take priority.
You should aim to make the minimum payment on each of your debts. However, where the debt is of a higher interest, you should make this debt a priority, and you should aim to pay more than your minimum payment.
Often, the minimum payment on something like a credit card will only ever cover the interest that is applied to the debt. This means that when you pay the minimum payment, you are only ever treading water at best.
Consolidate Your Debts
When you have several different debts with a number of lenders, it can be hard to manage all of your payments. You’ll be paying several different batches of interest, and this can really mount up.
Instead of paying a few different payments, wouldn’t it be easier to pay just one repayment?
By taking out online installment loans with Wise Loan, you will be able to refinance your debt. All of your debt will be in one place. This means only one set of interest, only one payment, and you will also have a final date in view for the end of the loan and for you to be debt-free.
Take Out a 0% Balance Transfer On Your Credit Card
If you have credit card debt, then there is an easy way of simplifying your debt and reducing the amount that you will have to pay back.
By transferring your balance from your existing card to a new one, you may be able to reduce your interest repayments.
Look for a credit card that offers 0% interest on balance transfers and move all of your existing credit card debt onto this one card. You can then set to work on paying off the debt on the card.
Make sure you know exactly how long the 0% interest will last. Often, the balance transfer will have a limited lifespan, and after a period of time, interest will start to be applied to your credit card.
Remember, if your 0% interest offer is coming to an end, you will need to move the remaining balance to a new card with a similar balance transfer offer on it.
Learn How To Use Your Credit Card Properly
While having a credit card may have driven you into debt, credit cards can actually be useful when used the right way. When making any major purchases, it is advisable to do so using a credit card as this will afford you a greater protection for if the purchase is defective or there are any problems in the transaction.
When using a credit card, make sure that you repay any spending in full immediately after you have used the card. That way, you won’t end up paying any interest on the spending.
Close Down Unused Accounts
If you have any bank accounts or credit cards that you no longer use, then you should cancel them. This will reduce the temptation to start using them once again. This could only push you deeper into debt.
Review Your Outgoings
Go through all of your outgoings and create a spreadsheet for them. Often, we forget about bills and debt repayments that we have going out, or only ever focus on the big debts and forget about the smaller bills and debts.
Work out exactly where all of your money goes each month and compare this with how much money you have coming in.
Cancel Unused Subscriptions And Memberships
When you go through all of your expenses, you may find that you are paying for services that you’re not getting the best use out of. This may include subscriptions to streaming services, or it could include membership to clubs or gyms that you don’t often attend.
If you’re paying out for something that you just don’t use, then you should think about canceling it so that you can save money.
Switch Suppliers On Your Household Utilities
When you signed up for your household utilities, you may have been enticed in by the price. Often, utility companies will provide the best prices for their new customers. Then, once you have been with them for a while, they will start to increase the price.
If you are paying more than you need to for things like your electricity, phone, cable TV, broadband, and insurance, you should look at switching to a new supplier.
When signing up for a new contract, make sure that you know how long your introductory price is valid for and what it will rise to after that point.
If you have specific budgets in place that cover the different areas of your life, then you will be able to control your finances better.
Start off by working out exactly how much your regular outgoings are in total. This should include all of your monthly or weekly bills, along with any repayments on your debts. This should be compared with the total income. Whatever money you have leftover will need to cover everything else, including your food shopping, spending money, and any travel costs you may have.
Split your remaining money up realistically and ensure that you have enough money in your budget to buy food.
Change The Way You Eat
If you are someone that relies on fast food and takeouts instead of cooking homemade meals, then it is likely that you will struggle with financial problems surrounding your food budget.
You need to break the habit of spending money on fast food and takeouts. You need to start seeing these as more of a treat instead of something that is always on offer.
Start to create meal plans. This means thinking about what you will eat in advance. By doing this, you will ensure that you always have a good, home-cooked meal waiting for you.
If you are someone that struggles with finding the time to cook, then you should think about using batch cooking to save you both time and money.
This means making up a large batch with several portions of the same meal and freezing portions to be eaten at a later date. While cooking one meal, you could save time and energy and prepare two or more meals at once. This will give you extra variety.
Change The Way You Shop
Once you have a meal plan in place, you will be able to create a shopping list that you should stick to when shopping. Avoid buying anything that is not on the list, and don’t get taken in by any of the special offers on items that you don’t actually need.