If you’ve been struggling with debt lately and you feel it’s time to make significant changes in order to pay off that debt faster, we’ve got some tips and ideas that should help you out. Escaping debt can be tough, but taking decisive action to turn the situation around is the most important first step you can take.
The worst thing you can do when it comes to debt is to bury your head in the sand and pretend the problem doesn’t exist. When you do that, you only make it harder for yourself to become debt-free. The sooner you start taking action to change your situation, the sooner you can experience the financial freedom you crave.
With all that in mind, keep reading and make the most of the advice and become debt-free with this guide.
Organize your income and debts
The first thing you’ll have to do is properly organize your debt and your money because you can’t take on your debt situation and fix it properly until you know the situation inside out. As we’ve already mentioned, the worst thing you can do is fail to look at the reality of the situation as it stands right now. Rather than worrying about how bad things are but being too scared to get a complete picture of it, go through your debts, your accounts, your income and see what the picture looks like.
Split your budget accordingly, with a focus on debt repayments
When you’re looking to tackle debt, you need to make sure that you’re making overpayments each month if you want to speed the process up. Splitting your budget is a good way to make sure you’re doing this. The essentials that you can’t live without should take up around 50% of your income, but that might differ depending on your situation. Then the remaining amount can be split between repaying debts and your own unnecessary spending. If you want to be really tough on yourself, you could dedicate that other 50% to debt repayments and become debt-free quicker.
Look for cheap meal prep options
Preparing meals is one of the things that many of us spend a lot of money on each week and each month. If you want to make sure that you’re always on top of your budget and not spending more money than you need to, it’s probably a good idea to get into the habit of looking for cheap meal prep options. Maybe you could base a week’s meals on what your local supermarket has on sale that week. It’s a good way to save money and it can also make meal prep easier and less of a conundrum in your household.
Always look for a discount code before buying
Before you make a purchase, you should think about how you can reduce the cost of it. That means comparing prices from different retailers and heading to places like NetVoucherCodes.co.uk where you can find discount codes. Going through those extra steps and being sure that the purchase really is necessary and not wasteful will definitely help you to cut your expenditure. And the money you save by doing all of this can then go towards making your debt repayments, meaning your debt will be repaid much faster.
Cancel unnecessary subscriptions
Many of us are tied to all kinds of subscriptions and subscription services these days. That’s just the way it seems to be. From gym memberships and streaming platforms to food subscriptions and just about everything in between, these subscription services can take up a lot of your monthly outgoings when you sit down and add them all up. That’s why it might be a good idea to cancel some of the ones that you no longer really need. It’ll save you a lot of money over the course of a year.
Reject unnecessary purchases
When you’re thinking of purchasing something, you should stop to make sure that it’s something that’s really important and really necessary, because that’s not always the case. You should try to reject purchases that you don’t need and restrict your spending to the more essential things. You can then treat yourself later when you’ve stuck to your budget and ensured that your repayments have been made on time. There’s nothing wrong with rewarding your successes in that way.
Stop buying small things when you’re on the go
Another way in which many of us spend more money than we had maybe intended to is by purchasing small things on the go. When you buy those coffees and snacks when you’re out and about, it’s easy to ignore them, put them on the credit card and forget about them. But when those relatively small purchases become a daily occurrence for you, that’s when the costs can really start to stack up. These are precisely the kinds of purchases that you should be looking to cut out of your budget.
Start increasing your debt repayment percentages
Once you’re in a position to do so, you should really think about increasing the minimum debt repayments you make each month. When you do that, your debt repayment schedule will be sped up and you’ll be out of debt sooner. All of that’s obvious, of course, but it still pays off to recognize it and to take action when you can to increase your repayments. Of course, this is something that should only be done if it’s financially sustainable for you.
Ask for a lower interest rate
Asking for a lower interest rate from your lender might seem like a pointless task, but it doesn’t necessarily need to be. When you’re willing to go out of your way to do this, you’ll find that lenders will sometimes be willing to consider your requests. They want their money repaid too, and if they think there’s a better chance of you being able to do that with the help of an adjusted interest rate, they’ll definitely think about it. And you don’t get it if you don’t ask for it.
Make use of your savings for paying bigger debts
Having your savings sitting in your bank account might seem like a good idea, and savings do offer a layer of comfort. Nevertheless, you should consider whether the meager interest you’re earning on those savings is better than paying off the more than likely much larger interest rates that are attached to your debts. Using your savings, or at least some of them to pay off your debts quicker might be something worth thinking about. You’ll be able to build those savings back up quicker later on when you’re already free from debt.
Sell what you don’t need and make use of that cash too
Selling the things that you don’t anymore and using these as a new source of cash can definitely be a good idea. When you get rid of things you don’t want, you free up space in your home and the money you make from selling them can then be used to pay off your debts a lot quicker than might otherwise have been possible for you.
Becoming debt-free is no doubt one of the biggest challenges you’ll ever face in life, but that doesn’t mean it’s not a challenge you can overcome. There are lots of ways to stay on top of your finances, cut your spending and pay off your debt faster. And the tips discussed above will help you to do precisely that.