Is There More to Life than Debt?
Debt: one word can instantly strike anxiety or stress into someone’s life. But there can be and there is more to life than debt. Your finances will not miraculously change overnight, unless you win the lottery of course, but changing your financial habits is something you can implement right away.
If you’re not sure where to get started, the first thing to do is to look at your monthly expenses and compare them with your monthly income. Seeing where your money is currently going will help you decide where you want it to be spent in the future.
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There must be some financial discipline in place in order to crawl out from under debt, but the steps to get there don’t have to be difficult at all. Here are actions you can take to start paying down your debt today:
Make a budget.
Organize Your Budget
It’s probably not the first time you’ll hear this and it won’t be the last either. The reason is that it works. You need to see where your money is being spent and limit the “wants” when you’re not covering the “needs.” It may be difficult to cut back spending on dining out or entertainment, but if you’re serious about slashing your debt, you’ll look at your “wants” as special treats and not incorporate them into your everyday expenses.
Pay off big debts first.
Compare all your debts and see which ones have the highest interest and annual percentage rates. These are the ones that need the most attention first. Make more than the minimum payments towards these bigger debts, while continuing to make the monthly payments on all the others. Continue the trend until everything is paid off.
Stop spending.
Stop Spending.
It may sound simple, but there’s no point to pay down debt if you’re only accruing more. This is where the budget plan comes into play.
Stick close to it and stop the spending on your credit cards until the debt is paid off.
When you reach your goal and you want to start using your credit cards again, make sure you have a financial plan in place when and if you begin using them again to prevent spiraling out of control and undoing your hard work.
Tackle tax debt.
If you owe taxes to the IRS, this is one debt that’s better to settle sooner rather than later. Use the resources available. Seeking financial help from a professional is a good route to take in order to potentially receive debt forgiveness with the government. A tax debt relief company can help negotiate a payment plan on your behalf and deal with any correspondence with the IRS to alleviate extra stress.
Apply extra funds.
When you’re gifted with a work bonus or raise, apply this extra money towards your debt plan first. Any extra income, whether it’s a one-time gift or income that will continue over a period of time, should be seen as an opportunity to get one step closer to your life without debt.
Sell your stuff.
Fiverr
Take inventory of your household items and see if you have anything worthy of selling. Set up a yard sale and/or set up an account online to share your goods for sale. This allows you a chance to clear out your clutter, while also making some money on the side, which can then be applied to your debt. Another way to make money on the side is to rent out your items (think surf board, for example) or any services you can offer via an app like Fiverr.
Change your spending habits.
If your common habit is to buy a latte every day, make it a weekly or monthly splurge instead and brew your own coffee at home. Consider cancelling your monthly gym membership and schedule at-home workouts or ways to exercise outside. You don’t have to give up your lifestyle completely, just consider making a few adjustments to it.
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Debt deserves your attention, but it doesn’t have to make up your whole life. Create short-term and long-term goals for yourself and make sure to celebrate your achievements along the way. Financial freedom is a lifestyle of its own and requires nurturing and consistency just as any other type of regimen.
More to Life than Debt
Learn ways to get the most bang for your buck and don’t let setbacks allow you to give you up on your financial success. Is this the year you’ll be debt-free? What have you found works best for you when it comes to paying down debt?
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Category: Debt
