Money Management: 8 Steps To Help You Overcome Debt And Increase Your Finances!
Here are 8 tips to help you get out of debt as quickly as possible:
Being in a financial quagmire is one of the most frustrating things that many families are dealing with today. The statistics would actually leave you speechless, as you discover that debt is almost like a global pandemic.
Millions of families are drowning in debts with no clue how to get out. People are owing their friends, owing their companies, owing the banks, owing just about everyone around then.
That’s not a good situation to be in. It can leave you dejected, disillusioned and in despair. And when the calls start coming from your creditors for you to pay up, that’s a trigger for HBP!
I know, trust me. I know.
So what do we do? How do we beat the monster called ‘Debt’?
Consider the following tips below. You may find them helpful:
1. Do Not Borrow
This would appear to be the obvious place to begin, right? And although you may wonder how that’s even possible to live without borrowing, it actually is possible.
There lots of people who live without borrowing, and this isn’t necessarily because they’re financially buoyant; it’s because they’re disciplined and they set their minds on living within their means.
The trick is actually to set your monthly budget and to be very strict and committed to following it. Some people allot their monthly pay to different purposes, and they never waver or shift from that goal. Money meant for gas goes to gas, if that money is used up for something else, it’s going to start affecting the general household income.
You can come up with a strategy of your own that you can work with. The goal is to not borrow, and to spend within your means, not beyond your means.
2) Do Not Covet
This is one of the commandments God handed down to Moses, but adhering to it will actually save you a lot of trouble and headaches.
One of the biggest problems people have to deal with is covetuosness, and this is especially so if you move with friends who spend big and wear expensive clothes, or you live in an expensive neigbourhood.
You want to do all you can to fit in, not to appear a low-life in their midst. This may lead you to borrowing just to keep up with others. And when the music starts playing, friends, no one’s going to be there for you.
So it’s time you wise up and get your priorities right. Don’t try to fit in with your firwnds or colleagues, everyone has got their own priorities and their own time.
3) Take Note Of What You’re Owing
Another important step for you is to have an accurate record of all your debts. Sometimes, people are overwhelmed by the notion of wrting down their debts.
The figure is frightening, so they don’t want to see it. They just say to themselves, “If I get some money, I’ll look at the debts I’m owing then.”
But you really have to sit down and make your debt list, with no shame or terror. It’s the first step towards working out your payment. That way, you can put things in perspective, analyze the debts if you have multiple loans, see which ones are the most urgent, and decide how much you can commit to paying each month till the debts are cleared off.
And as you make your payment, take note of them as well. Tick them off in your debt sheet, and before you know it, you’ll eventually settle all outstanding sooner than you think.
Sort your debts by highest interest rate and total loan balance. Which debts are your “worst” or most pressing ones? Make a plan to prioritize which debts to pay off first.
4) Also, Take Note Of What You’re Spending
While you’re paying off your loans, it is important that you also take into account what you’re spending your income on.
It is important that you’re doing this with diligence, as it will help you figure out where your income is leaking out through. Perhaps you’re spending some or most of your income on items you don’t need. Perhaps you can find a cheaper alternative for some things you regularly put you money on.
If you track your spending for a few months, you’ll find a positive direction forward with your finances. Decide what’s important to your household, really important, and what can wait. Until you earn so much and you’re not in debt, you can’t afford to be extravagant and frivolous with your spending.
Don’t go on a shopping spree, buy a dozen toys for the kids and eat dinner at a 5-star restaurant just to make your spouse happy, when’ you’re still owing mortgage.
At the end of the day, your debts are still waiting for you. But paying off debts first leaves you with peace of mind to enjoy your family.
For your sanity and health, you must work towards clearing your debts. It should be a priority.
5) Buy Big, Spend Small
Many households have discovered this trick, but yet many haven’t! You actually lose money when you buy small items multiple times. You save money by doing your spending once. Go for targeted shopping and buy bulk items, rather than small items which you’ll need to go buy again every few days.
So by buying big, you save money. What you saved, no matter how little, can go towards buying something else for the family.
Before going for your next shopping, or after you get your salary, make a list of the items you need to decide to buy them in bulk in other to save money.
Cutting down on the small spendings is one of the most important strategies that every household must learn. It will not only get you out of debt, it will also save you a token, which comes down to an impressive amount if you pool them together.
6) Look For Other Opportunities To Earn Extra Imcome
Legitimate money making opportunities abound everywhere, you only have to look for one that works for you. You can ask questions, speak to people already succeeding at something, and decide which extra stream you want to add to your income source.
In this age we live in, there loads of money making skills you can acquire and run from your home. Of course, many of such schemes are just hocu-pocus. But there are legit ones, like Opera News Hub, for instance.
Even if you’re not a writer, there are businesses you can successfully run from the comfort of your home, and they won’t really be in the way of your regular job.
Like I said, you only need to ask and research on these opportunities.
But the point is this, you can’t rely on only one source of income if you want to pay your bills and live a decent life. One stream of income just isnt enough, unless you earn a 7-digit salary per month!
And even then, you got to be careful.
If you really one to beat debt, this is one step you must take. Sacrifice. You must be willing and prepare to do what it takes. You must be ruthless with yourself, deny yourself some unnecessary luxuries for the timebeing.
I know some folks who deliberately didn’t order a credti or debit card from their banks, because they didn’t want that unhindered access to their accounts.
If you don’t use a credit card, the temptation to spend money by whim is taken care of. That’s not to advocate for no use of credit cards. But you can find other methods that work for you, so that you don’t spend money unnecessarily.
Cut down on your spending, don’t be pressured into buying what you don’t need. Go for the more important things per time.
Learn to save and be accountable for every Kobo you spend. Every Kobo matters to building your financial empower.
If you want to buy everything you desire and everything that tickles your fancy now, you’ll soon spend all your earnings and more.
8) Honesty Is Still The Best Policy
If you’re owning anyone, it’s best to be upfront and sincere about it. Don’t hide from them. Don’t ignore their calls.
This point is important, because if you avoid people because you’re bowing them money, it’s annoying and you come across as a fraud, as someone people can’t rely on.
If you don’t have money to pay up presently, you should be honest about it. Answer your phone when your creditors call you, assure them you don’t have the money yet, but that youll pay up soon. If possible, you can give them an idea of when that ‘soon’ will be.
They may be upset and make threats, but at least, you’re honest with them. It’s better that way.
Be sincere with your desire to pay and let them understand when you’re able to raise any money for them.
Note that overcoming your debt isn’t something that’s going to happen overnight. But with careful planning and taking the right decisions, it can be achieved.