Here’s a recap on all you need to know:
1. Know your debt
Before coming up with a plan to get rid of your debt, learn everything you can about what type of debt you have. Why is this so important? Because different types of debt come with different methods of dealing with it. Paying off debt with a high interest rate will allow you to save money in the long-run. But whatever debt you decide to pay off first, always start with a plan and create a budget for the extra payments. Staying focused and sticking with your plan will help you reach your goal.
2. Draw up a budget
Although it requires complete investment on your part; you can work out a way to budget when you’re already in debt.
- Track your spending
In you have more cash going out than coming in, then essentially you need to spend less and earn more. To do this, you need to take a look at what you’re earning versus your expenses. By doing this, you can set up a reasonable budget that will suit your lifestyle.
To get an idea of where your money is going, you should keep track of your spending for about a month.
- List all of your expenses
Start by compiling a list of all your current expenses. Try and think a head as far as possible for each month. This will help with situations where you have to deal with additional expenses including birthdays, holidays, or emergencies. If you can include these in your budget, you’ll be able to plan accordingly.
3. Make an effort to start saving
Open a savings account to put funds away until you have saved a substantial amount. That lump sum can then be used to pay off some of your outstanding debt.
Make savings automatic, what you can’t see you won’t miss. After you’ve set up your savings fund and calculated the savings you need to achieve your short to long-term goals, you should have that money automatically deposited into a separate savings account. Sign up to learn more about the Meerkat Savings Plan.
4. Stop over spending
If you can’t afford to pay your bills, investigate what could be seen as luxuries like:
- Full DSTV package
- Lavish holidays
- More than one cell phone contract
- Eating out
- Gym membership
- Shopping sprees
- Cocktail evenings with the friends
Find ways to bring down your costs with the goal of having something left over every month. If your goal is to save whatever you can, then the best way to do this is to only spend on the things that are absolutely essential.
Stay on top of your accounts
Do your best to stay on top of every outstanding account you have, paying the minimum amount necessary to not fall behind. And remember, even the smallest of accounts could quickly become big debt if left too long without payment.
When you are finished paying off an account, use that same amount to add into paying off another one. Paying more than just the minimum amount can make a substantial difference in paying a debt off quicker.
Ask the professionals
Our team at Meerkat can help you with that! We provide immediate financial relief and protection from creditors and give you a chance to pay off debt in an affordable way without losing assets. You pay one reduced instalment, and, in many cases, we can reduce the interest rate as well. Contact us now and start your road to debt-free living today!
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