7 practical finance tips to get out of debt

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We have been facing many hardships and loss during this time – emotionally and financially. Many big companies have been forced to restructure and retrench staff and small business have had to close. All this while the cost of living continues to increase. This time has forced us to look at our finances and revise our budgets. One way of allowing for a sense of stability is to manage – and get out of – our debt.

Here are 7 practical ways to help you:

  • Assess your financial situation

You need to understand the debt you have. Make a list of all your debts. Including the interest rates, the minimum payment, and the due date for the debts. Knowing how much you owe and the interest you are being charged, helps you create a plan.

  • Create a Budget and Track your spending

Create a realistic budget of what you need to spend your money on. Consider the money coming in versus what goes out. This will give you a screenshot of your financial health. 

  • Trim down unnecessary expenses

After you have created your budget and have inspected your bank and or credit card statements you need to underline those costs that you really can do without.  It is important that your budget matches up with your lifestyle. 

  • Live within your means

Having insight into your financial situation allows you to adjust downward for a short while. Making lunch for work instead of buying take-out will save you money. Forgoing some luxury items for a while and buying clothing only when it is essential would also assist. 

  • Make paying off debts a priority

Having freed up some cash,  it is vital to pay off your debts. Whether you pay the smallest one first or the one with the biggest interest rate. It does not matter, as long as you reduce your overall debt. 

  • Make More Money

Adding a side to bring in more money to pay off those debts could also assist. Maybe you could try asking for a raise or extra shifts at work.

  • Consider debt Consolidation

What this means is, getting a loan to pay off all existing debts and owing only one creditor. This might just help to get more cash in hand.

 

*These are the opinions of the writer and do not necessarily reflect the views of Vannie Kaap News.

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