This is a collaborative post.
Debt can happen to anyone. It’s a punishment inflicted on anyone who needs to visit a hospital, go to school, or start a business. And it can follow you around for every financial decision you intend to make in the future. Any loan will be affected by it, whether you’re looking for a business, auto or mortgage loan.
And it’s a hole that can be difficult to get out of. If you’re having trouble dealing with your debt, take a look at our guide to help you through.
That might look like we just said, “up is down”, but there is a method in the madness. As counterproductive as it sounds, paying more now could save you money in the long run.
Chances are, right now you are slowly getting rid of your debt with minimum monthly repayments that just seem to never end. The interest is mounting, and it feels like you’re not making any progress.
To make it end quicker, you’re going to have to pay more. The more you pay, whenever you can, the less time will pass and the less the interest can affect you. The quicker you are with paying it off, the less interest can be inflicted on you.
So, if you have a sudden injection of money and no other commitments, it should first go to your debt. Even if you don’t have that stroke of good fortune, you can work on your budget.
Work on your budget
If you’re worried about your debt, maybe it’s time to readdress your monthly finances. Write down your income and collect your outgoings. The simplest way to save is to use the 50/30/20 method. Your income should be split between needs at 50%, wants at 30% and savings or debt at 20%.
Look through your subscriptions. We’re all paying for too many streaming services we watch one show from, and there might be a magazine you don’t read anymore hidden in there.
Take a look at your spending habits over the past couple of months. Is there anything you can cut back on? Do you need that $5 coffee when you can make some at home and take it in a travel mug?
Of course, having a coffee every day isn’t why you’re in debt, but if you can lessen your spending, you can contribute more than the minimum monthly repayment amount, and get your debt paid off faster.
It is also a lot easier to handle your debt if it is all coming from one place. Review the best debt consolidation loans here, so that you only have to keep track of one sum when you are reviewing your budget.
Increase your income
This is not an easy option. In fact, we wouldn’t blame you if you laughed reading it, but if you can increase your income, even if only until your debt is cleared, you’ll then be free to get on with life free from debt. Think of it as a hard year for an easy life.
You can approach your boss for a raise, outlining your strengths and what you bring to the business. If they turn you down, you can at least ask what would change their mind and work towards that.
You can look into a side job or business. Look into gig work like dog walking, babysitting, cleaning, Uber driving and delivery jobs. If you have some talent and marketing know-how, you can look into the influencer lifestyle, or eCommerce, although that would take a while to establish an audience.
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