With an increasing number of people falling into unmanageable amount of debts, it’s very important to come up with the best debt management strategies. Although it comes with a great deal of effort, as borrower, once you free yourself from debts it will be worth it.
Do the numbers first– You need to ask yourself how much loan you have, what their total cost is and how much will they cost you monthly. It’s important to have a clearly written amount of what you owe by reviewing your debts. Once you have done this, you will be able to come up with the best repayment plan. This will also help you to balance an affordable monthly payment that you can afford. Remember, the sooner you pay off your debt the faster you will be able to save
Set your finish line before starting– Although it might seem daunting, setting goals is the first step that will make you succeed. For instance, your goals could be reducing your debt by 50% within 1 year and 100% within 2 years. While doing this, it’s imperative to increase your income to cater for this. When you start doing this you might feel like you are not making any progress because as you make payments, the interest will push your debts further. To overcome this list all your savings, liabilities, and recurring expenditure on a simple spreadsheet. More so, focus on reducing your expenditure.
Look for quick achievements– Just like being disciplined you should look for quick wins. You can practice quick wins around the house such as washing the dishes or brushing your teeth. With every small task that you check off your list, you will feel motivated to accomplish a bigger task. After all, if doing a small task can make you feel happy how will feel once you have accomplished a huge task like clearing your debt? You can also call your phone, insurance, and credit card providers to look for cost saving opportunities.
Be impulsive if possible– Although this might be what brought you into debt in the first place, being impulsive can be advantageous. The sooner you take action the sooner you will move from your stress and issue. Being impulsive does not concern only big stuff. You can also apply it on small stuff. For instance, if you notice that you are spending a lot on coffee, you can decide to buy a coffee maker. By doing this, you will find yourself saving a lot of money in the end.
Manage the system– Search for the best ways to lower your debt. On the saving front, you can make a list of your bills and make arrangements with each company for automatic payments from your checking account. Although you will be hesitant at first you can start with the ones that you often forget to pay to avoid getting late with the payments. Also, designate 10% of your earnings to go directly into your savings account automatically. You can then use these funds to cater for payments later on when they are needed.
Well, those are some of the successful strategies that you can use to pay off your debt. The sooner you start the better.