Paying down debt is a challenging process but it is well worth it.
If you have made the decision to slay your debt, you will need to set yourself up for success so that the process is a little easier.
Here are 6 tips that will help you to be successful with paying off and keeping off debt:
๐ญ. ๐ฌ๐ผ๐ ๐ต๐ฎ๐๐ฒ ๐๐ผ ๐ฐ๐ผ๐ป๐๐ถ๐๐๐ฒ๐ป๐๐น๐ ๐๐ผ๐ฟ๐ธ ๐ผ๐ป ๐๐ผ๐๐ฟ ๐ ๐๐ก๐๐ฆ๐๐ง
Your mindset is what will help you get through the tough days as you embark on your debt repayment journey.
Your mindset is the soil on which you plant the seeds of what you want to accomplish. It is the key foundation for you to be able to accomplish your goal.
It is critical to your success with money because what you tell yourself you can do, you are likely to do it and what you tell yourself you cannot do, you are unlikely to do it.
When it comes to your finances, saving money, paying down debt, building wealth, there are always things that will discourage you.
Once youโve taken those first few steps, youโve made some progress, you may face obstacles, unplanned things may happen, your circumstances may change. These are all things that can cause you to start experiencing self-doubt. Then you may start telling yourself things like: I will never achieve this. This is too hard, etc
Constantly working on your mindset will take you through the tough days and move you closer and closer until you achieve your goal irrespective of how rocky the journey is.
๐ฎ) ๐ฆ๐ฎ๐๐ฒ & ๐๐๐ถ๐น๐ฑ ๐จ๐ฝ ๐๐ป ๐๐บ๐ฒ๐ฟ๐ด๐ฒ๐ป๐ฐ๐ ๐๐๐ป๐ฑ
An emergency fund is the money you put aside to cover the financial surprises that life throws at you. Life happens to every one of us and it does more frequently than not. These unexpected events are often very stressful. I felt broken when I lost my job. I felt like my world was crushing right before my eyes. My business was no where close to generating an income yet. I was only able to pick up my self and think straight, to begin my search again because I had a few months of expenses saved up. It took me six months to get a new job and as I watched the clock tick away each day, I was worried of what will happen when my savings were exhausted.
Some of the emergencies most people experience include:
- The loss of their job or business
- Unexpected home repairs
- Unexpected car breakdowns
- dental emergency
- unplanned family emergencies
- Unplanned travel expenses
Saving money in an emergency fund pot will help you in case of an emergency, so that you donโt fall back on your line of credit.
It is often advisable to have a minimum of 3 to 6 months of expenses in your emergency fund. If you can make it to 12 months, you are well suited for financial stability
๐ฏ) ๐๐ฒ๐ฎ๐ฟ๐ป ๐ง๐ผ ๐๐๐ฑ๐ด๐ฒ๐
Budgeting is a very important part of managing your finances as it will help you track your spending.
The term budget often sounds restrictive and sounds as though you are being prevented from spending your money. So let’s ditch the word budget and call it your conscious spending plan. You can call it what ever name suits you so long as it helps you track your spending and stay on top of it, it’s all good.
Learning how to budget is one of the most important skills that will help you with your journey to financial wellness.
๐ฐ) ๐ฃ๐ฎ๐ ๐ ๐ผ๐ฟ๐ฒ ๐ง๐ต๐ฎ๐ป ๐ง๐ต๐ฒ ๐ ๐ถ๐ป๐ถ๐บ๐๐บ ๐ฃ๐ฎ๐๐บ๐ฒ๐ป๐๐ ๐ข๐ป ๐ฌ๐ผ๐๐ฟ ๐๐ฒ๐ฏ๐
Most people have debt in the form of credit cards, personal loans and student loans. Worst still, many people don’t know how much interest they pay on their credit card as they don’t know the interest rate on their cards. As a result they only stick to paying the minimum amount required for to maintain their credit payments every month. This is a huge mistake. If you stick to making just the minimum payments on your credit card,ย it will take you a really long time to pay off the full balance during which you would have spent more than double if not triple the amount you initially borrowed.
Making extra payments on your debt will help you save a lot on interest and help you pay off quicker
๐ฑ) ๐ฆ๐๐ผ๐ฝ ๐จ๐๐ถ๐ป๐ด ๐ง๐ต๐ผ๐๐ฒ ๐๐ฟ๐ฒ๐ฑ๐ถ๐ ๐๐ฎ๐ฟ๐ฑ๐
When paying off debt, it is imperative that you set aside your credit cards and focus on using cash or your debit cards.
If you consolidated your debt into one big loan or made a balance transfer, be sure that you don’t start using the allowance that you have now created on your credit card for new purchases. If you are unable to control your spending, get rid of your credit cards by cutting them off. This will keep the credit cards away from site. Also, this will help you built that habit and learn to control your spending before you start using your credit card again the right way.
If you keep using those credit cards or raving more and more debt, then your efforts will be jeopardised and you will feel demotivated
๐ฒ) ๐๐ถ๐ป๐ฑ ๐ช๐ฎ๐๐ ๐ง๐ผ ๐๐ฎ๐ฟ๐ป ๐๐ป ๐๐ ๐๐ฟ๐ฎ ๐๐ป๐ฐ๐ผ๐บ๐ฒ ๐ง๐ผ ๐๐ฐ๐ฐ๐ฒ๐น๐ฒ๐ฟ๐ฎ๐๐ฒ ๐ฌ๐ผ๐๐ฟ ๐ฃ๐ฎ๐๐บ๐ฒ๐ป๐๐
You could get a bonus from your job, a pay rise or start a side hustle. Any additional income that you get should go into paying off your debt
If you are overwhelmed with your debt ( student loans, credit cards etc) and donโt know where to start, remember that the first step to achieving anything great is to Start.
Work on your mind set and make that decision to pay down your debt. Come up with a plan to do and then go ahead and work the plan. There will be tough days but with a strong mindset and focus, you will achieve your goal, pay down your debt and free up your finances so that you can take that next step.
If you haven’t already done so, download our free Financial Success Pack. It teaches you the the foundation to achieving financial stability and provides you with the tools you need to get started.
Becoming financially educated is not a guarantee for success. It requires working on your mind and taking the actions necessary to drive you forward.
If you want somebody to hold you accountable, and show you the steps you need to take with a step by step guide on achieving your financial goals, reach out to us and we will hold your hand and take you through the steps so that you achieve success in a shorter time frame, contact us at hello@mysavvyfinance.com
