There are many things that people want in life: wealth, power, glory. Unfortunately, we call cannot be wealthy so some people tend to live above their means and then here comes the debt. Your financial goals are very important in life, because they can hold you back from not enjoying life to the fullest.
There are different kind of debt such as good debt and bad debt. An example of good debt would be student loans. A lot of people have them and student loans usually will get someone a higher paying job. Bad debt would be more like credit card debt or living above your means. Usually credit cards have a higher interest rate on them and unless you pay off the credit card every month, you will carry a balance and then your interest payments can start adding up.
Being in debt can loom over your head and make you feel like you cannot overcome the debt. Debt can hurt your financial goals as buying a house, retirement, or even going on your dream vacation.
Debt tends to have a higher stress as well which can make you feel depressed or upset. When you are in debt, you feel like you are sinking and that you feel like you cannot get that jumpstart. Money education sometimes is not taught in school. The best way to learn about money education is by doing online research.
Debt does not have to last forever. If you have a plan in place and work really hard, you can accomplish those goals and kick them to the curb! I have compiled by top five to Jumpstart your Debt Payoff and Succeed!
1. GET ON A BUDGET
Being on a budget is the most powerful item that you can add to your list. Making sure that you are sticking to your budget is the hardest part, but you can do it! A budget may seem like it is a hard task, but budgets are very easy to setup. A quick setup would be to figure out how much money you make in a month and find out where your money goes. Having a budget can certainly help you pay off your debt faster, because you know where your money goes (needs v. wants). Make cuts into the want category and put that money towards paying off debt!
2. FIGURE OUT YOUR TOTAL AMOUNT OF DEBT
Eep. This is the scary part. Are you sure how much debt you have? If not then you need to figure it out. Coming to terms with your money decisions is hard, but certainly doable! You need to figure out what you have done in the past to make sure that you do not repeat it!
Action Step: Grab a sheet of paper and write down your debt with the interest rates. How much do you spend each month?
Now the Google Store (not sure if this is on Apple) has an amazing app called Debt Payoff Planner. This app is absolutely brilliant! You can write your debt, your APR, minimum amount due, put your strategy, and how you want to pay it off (ie debt snowball from balance low to high, debt avalanche from APR high to low, or as you listed.
3. STOP TAKING ON MORE DEBT
Being in debt is hard, but you need to make sure that you have what you have and that’s it. Impulse buying is where a lot of credit card debt comes from. If you find it hard to do your current debt then how are you suppose to handle future debt?
Action Step: Find something you want? Sit on it for about 30 days. After those 30 days, if you saved up for it and you still find out that you want it, you may purchase it. You have to realize something though. You must wait on purchases.
4. LEARN HOW TO LIVE BELOW YOUR MEANS
Sometimes people tend to live above their means. What this means to you? You spend money that you do not have to keep up with your current lifestyle such as vacations etc to impress people. When you spend less, you have more money to focus on your debt planning. Focusing on your debt means that you can get it paid off faster and free up more money.
Action Step: Check what you have done within the past six months and write down anything that you think could have easily been avoided if you were focusing on a budget.
5. START TO PRIORITIZE YOUR MONEY
Want v. survival is where this comes to. Designer clothes, bigger house, take-out etc. are those important for want or survival? Paying off your debt asap will ensure that you do not keep the money for long times. You need to figure out what is most important, a debt-free life or living above your means.
Action Step: Take your past 30 days and divide it into want v. survival/need. Where could you save money? Now think about the next 30 days and can you cut back on your spending today to make the next 30 days more debt-free?
Paying debt off faster will get you towards your debt-free life. Living frugally does not mean forever, but you can learn a thing or two about your current lifestyle and where you want to go from there!
1. Get on a budget
2. Figure out your total amount of debt
3. Stop taking in more debt
4. Learn to live below your means
5. Start prioritizing your money
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