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5 Tips for Paying Off Debt

By September 6, 2019September 16th, 2021No Comments

Is paying off debt one of your top priorities? Are you sick and tired of worrying about upcoming payments, fees, and the growing balance on your monthly statement? Are you looking for some practical tips for paying off debt?

You’ve come to the right place – but we’re not going to sugar coat it for you. Paying off debt is, for most of us, a massive undertaking that requires making some real sacrifices.

To help you learn how to pay off debt in a way that works for you, here are our top tips.

1. Know what you’re dealing with and set a goal

One of the best ways to kick-start your debt-free journey is to sit down, work out how much debt you actually have, and set a goal for yourself. When you have a clear picture of the scale and scope of your debt, you can work backward to work out how much you’ll need to set aside each month.

Then, set yourself a goal. For example, it might be to pay off your credit card before Christmas. This goal will help keep you motivated, even when you feel tempted to grab the plastic and splurge.

2. Avoid creating more debt

If you’re wondering how to pay off debt, know this: it’s going to be much, much harder to rid yourself of potentially crippling debt if you’re continually adding to your balance. So, if possible, put down the credit card. If you find it difficult to resist temptation, you might even like to cut them in half or give them to a family member to keep safe.

3. Create a realistic budget

You’ve committed to paying off debt. Now, you need the cash to make that happen. For this, a tight budget is critical.

First, work out your monthly income. Then, determine how much the essentials cost you – this includes things like rent, food, utilities, transport, and childcare. Subtract your essential costs from your monthly income, and you’ve got what we’ll call your ‘spare’ funds.

It’s worth thinking about how you usually spend these ‘spare’ funds. Are you in the habit of eating out a few days a week? Do you pay for streaming services or gym memberships that you’re not using? See where you can cut back and allocate that money toward paying off your debt.

4. Pick up a side hustle

The gig economy has revolutionised the way many of us work. If you have the time, use this to your advantage. Another great way to raise funds is to sell your unused clothes and belongings. Look for clothes you bought but never wore, furniture you no longer need, even kids’ toys that your little ones have grown out of.

5. Consider debt consolidation

Facing a significant amount of high-interest debt, like credit card debt? A consolidation loan may be a good option. Put simply, a consolidation loan groups all of your debt into one, lower-interest loan. That means one monthly repayment and a lower interest rate – these factors should help you become debt-free faster.

Remember, paying off debt takes time

Ridding yourself of debt is a long process. But don’t give up. Freeing yourself from monthly repayments will be a huge weight off your shoulders – we guarantee it.