If you are in debt right now it can be for a number of reasons. One of the most common is because you have taken loans from your bank. Another could be because of your credit card and the fact that you are an undiagnosed shopaholic. If you are struggling to get yourself out of the hole that you feel like you have dug for yourself, here are 5 quick tips to getting out of it fast. One thing you must keep in mind though: take advantage of the services in your area.
Making use of these people and their services is definitely one of the best ways to get yourself out of financial hardship. These are people who work outside companies to offer you some top-notch financial advice. If you are in Queensland, for example, make sure you look into the many independent financial advisers Brisbane and other areas have to offer. Take advantage of these people, as they have some valuable insights to offer. In addition to this, try out these 3 tips:
Know how much you owe
You may think that this is a relatively easy task, but it isn’t. The bills might have mounted up while you weren’t looking. Usually, the amount you think you owe is not even close to the actual amount. So root through those boxes overflowing with unpaid bills and start adding up the total amount that you do owe, to all these different parties. After you have added up all of these, make yourself a cash flow calendar. This is a simple affair that you can use to track the money in your bank accounts, going in and out. You can also keep track of when the money goes and when it comes in. This includes when you get paid, and how much you lose from taxes, as well as your expected bonuses. Try to figure out when your bills are due to be paid every month, as well as their average cost.
Follow a few simple rules
If you want to start getting out of your debt, you are going to need a plan of action. Get organized, and then start setting some goals for yourself. These can be either in the long or short term. One tip that can be given to you is that you shouldn’t outright stop spending on unnecessary things. Instead, try to curb the spending, and then gradually keep it under control.
Trying to go “cold turkey” could actually be pretty bad for you emotionally. Think about it: if you wanted to stop smoking, thinking about immediately cutting your cigarette supply off would turn you off the idea entirely. It seems too hard to do. However, gradually reducing would actually seem reasonable. A simple rule you could follow is one set down by Gail Cunningham, called the 10×10 rule. Try to cut $10 off 10 different expense accounts. You won’t feel the loss because it is very little.
However, you will have saved $100 by the end of the month. Applying this to the rest of your expenses can result in big savings. Just like all those little bills add up to make huge costs, little savings can add up to a big amount.
Use cash, not credit
When you go shopping, you probably use your credit card to buy items. This actually results in you spending a lot more than you realise. This is because you don’t feel like you are using real money. If you can’t see the money leaving you, you won’t be nearly as impacted by the experience as you would be if you were using cash. This is why credit cards can cause so much debt.
Instead, force yourself to resort to cash. When you see money leaving your hands physically, you are going to feel far more pain than you would when swiping a bit of plastic. The cash being in your hand makes you more aware of your expenses. It makes you think twice before buying that all new laptop for no reason.
If you feel like you have been spending on a lot of things that you don’t need, you are going to need to get yourself in check. This is the first and best step that you can take to assuring yourself that your debt repayment strategy is going to be a resounding success.