If your heart says ‘travel’ but your bank account says ‘to the back yard’, it might be time to start boosting your net worth. And the best way to move your account out of the red zone and into the black is by eliminating debt and developing constructive spending habits. The team from Debt Busters has all the tips you need.
1 Create a budget (and stick to it!)
Firstly, and most importantly, set up a budget and stick to it. Start by making a list of your household income, expenses, debts and balances, and see which are essential (rent) and which can be eliminated altogether (daily latte). By setting yourself realistic spending limits and sticking to them, you’ll be one step closer to a debt-free life.
2 Cut back where you can
Take a look at your luxury expenses and see which of them you can really afford. Sure, we all deserve to treat ourselves but when it comes to busting your debt, you need to know what to let go. Weekly manis are fabulous, but if you can cut them down to once a month, or even do them yourself, your bank balance will thank you.
3 No more new debt
Before spending money on a non-essential item, always make sure to ask yourself, “Can I afford it?”. If you can easily pay cash for those drool-worthy stilettos, then go for it. But if you’re going to need to use three credit cards, rather leave them on the shelf. According to Ian Wason, CEO of Debt Busters, 99% of people who approach his company for help can’t even afford to pay off their existing debt – so before you dig yourself in any deeper, say no to unnecessary spending.
4 Check your insurance
Think you’re paying too much for insurance? You might be! Requote your insurance every year or, even better, every six months, in order to ensure you get the best rate possible. You’ll still be covered and you’ll be saving money, too.
5 Manage your bills better
Make sure you keep up with all your payments in order to avoid late fees, penalties and blacklisting. As soon as your salary comes in, take care of all your bills instantly while you have the resources – and if you’re ever curious about your credit rating, request a free one online for your peace of mind.
6 Get in the know
Knowledge is power – so the more you educate yourself about debt, the more you’ll be able to avoid its many pitfalls. Learn to understand interest rates and inflation, read up on debt consolidation and debt counselling, and make sure that when it comes to busting debt once and for all, you’re an expert!
Looking for more money hacks? Read our 8 golden rules of managing bills.