Debt will always go hand in hand with our modern consumer driven society. Although, to be fair, our society has been driven by money and consumerism since the concept of money was invented.
According to statistics there are 14,482,877 credit cards in Australia as of March 2020, so don’t worry, you’re not alone. It seems daunting but there are ways to climb out of the swirling vortex of anxiety that a hefty debt can land you in.
Debt is a dreaded word for most people. Whether you are going into debt to purchase a car, to buy a real estate property or to finance your business, the important thing is you don’t forget that you are responsible for it. Ask yourself, “Is it a good or bad debt?” If it is a good debt, then you may take into consideration getting it. But if it is a bad debt, you may need to consider some suggestions below on how to get rid of your debt:
Organise Your Debt
How are you going to pay off your debt if you don’t know how much and who you owe? Sit down and make a list of every institution you owe, how much you owe, interest rates and minimum payments you can make. Figure out a repayment plan and stick to it. No fudging the plan. There are many methods, so find one that suits you and stick to it!
Create A Budget
Budgets are tedious and annoying, but a necessary evil. Budgets can “minimise the tendency to overspend each month because you can see how much money you have to play with” . Keep it realistic and be honest with yourself with where you can cut spending and where you need to keep spending: e.g. clothes vs. food shopping, nights out vs. utility bills. Any surplus money at the end of the month should be added to your debt fund. Paying off debt is not a quick job, there are no shortcuts (unless you win the lottery), chip away at your debt and you’ll be debt free and happy…eventually.
Pay in Cash
You’re less likely to spend money if you’re paying in cash. A credit card, “while tangible, does not represent actual money. It’s just a piece of plastic, and a shopper does not see the result of their expenditure for almost a month” . You don’t need to cut your spending entirely. Go warm chicken as opposed to cold turkey. Small expenditures, not treats.
Pick Up More Work
Small business finance company, Max Funding says, “more money coming in means more cash to add to your debt fund. If you can earn overtime or pick up more shifts at work, do it.If you have some marketable skills, like playing an instrument or writing, try and find out if you can earn a bit of money on the side. It will be worth it!”
Put Unexpected Cash Where It’s Expected
Tax returns, bonuses, money from trading in your car or selling your TV, inheritances etc. any non-income related money that you receive should be added straight to your debt fund. These unexpected bonuses might make you believe you should go out and celebrate. Think again. You have responsibilities, you have debt. You can celebrate when you’re debt free, until then: spend smart.
