There are a few stressful periods in life – buying a house, getting married, having children, and trying to work out how you will get yourself out of debt. Well, here is a brilliant list that doesn’t compromise your lifestyle, but will get you in the good credit score range you’re looking for.
Make a list of all of the debts you have and put them in order of most urgent to least urgent, or highest to lowest – whatever makes you feel comfortable. Having them in order makes it easier to see what you can pay off soonest or what will give you the most benefit by doing so.
Open a new bank account. Nothing fancy, just a straightforward savings account, this is where you are going to start putting money away. Either way, start saving with a goal of $2 thousand in mind.
Go through your minimum monthly repayments, a lot of the time the minimum payment barely covers the interest. Make some calls and see if you can come up with a repayment agreement that is more suited to your circumstances – you can usually get a much better deal.
Create a weekly or monthly budget that makes sense to your income and lifestyle. Many of us are living slightly outside the lines of what we are earning, meaning we are always playing catch up.
Sell, sell, sell. Take a good look around your home, there are probably plenty of things you don’t use, and you don’t need. Get a post-it notepad and start labelling up everything that you haven’t used in the last 3 months.
Take a look at transferring your balances. If you have been stuck paying high-interest rates, moving any balances to lower interest rate cards or accounts will help you take a fairly substantial chunk out of your payments. If you are going to do some account hoping, pay careful attention to the terms and conditions so that there are no nasty surprises further down the line when the rates go back up. You’ll need to be fair on top of this one to make it work, but plenty of people do this with no issues.
Increase your income. As above, head around your home and label up everything that you could sell, it doesn’t matter if it is at a profit right now, it’s more about decluttering your home and getting your finances in order. You can also start a blog, sharing your tips, head to UpWork, or perhaps People Per Hour and see if you can wrangle up some freelance work in your spare time. The chances are you have a few skill that will work in your favour here.
Don’t be so hard on yourself. When you are paying off debt, you can often feel like you don’t deserve to order that pizza or buy the shoes. And while it is likely smarter to save the cash and put it towards paying off your debts, it’s not going to feel great if you feel like you can’t have a life while you’re doing it.