Steps to pay off your debt? Okay … I thought I’d share this with you.
My shopping is suffering so I need to make a plan.
STEP 1. BE HONEST
I had to wonder about this.
But apparently I was required to be honest about how much I owe and to whom, only then would I be in a better position to come up with ways to pay off the debt. Tip: Don’t just look at the big numbers because the daily java adds up aswell. Now you’re more likely to come up with a solution to your problem.
Now: “Look around the house and open the cupboards to see how muc hof what you have was bought on credit or was funded by a loan. Write it all down and the amount you owe like your house, car, bank loans, other loans, store cards and what you owe your mother, your neighbour and that friend you’ve been dodging. Oh and call the credit beaurea incase there’s anything else you mentally blocked out. 🙂
STEP 2. CREATE A BUDGET
There a great few websites that offer free buget tools with loads of advice do that! I did and now I’m educated. Note to self: To be financially heathly your debt should be less than 30% of your income. I can just hear my husband laughing at this one. The kind of laughter where there’s tears and falling on the floor and total hysterics.
STEP 3. CUT BACK
Be afraid, be very afraid. Cancel whatever you can do without and then look at whats left. Now look at how much you generally spend on those items and figure out ways of buying smarter to save small amounts. All this will equal more money to spend on those pesky debts you already have.
Please note: Pay off the debt with the highest interest first.
STEP 4. TALK TO THE BANK (BANKS)
This is what happens after you calculate how much you owe and still realise after the first three steps that there is little to nothing left. Speak to the creditors and negotiate a lower rate. Some may and some may not but you should at least try. Note: you will have to pay for longer but you won’t get blacklisted.
STEP 5. SAVE TO PAY DEBT
As per my previous advice you can’t save and have debt but you need an emergency stash for just incase. This means in case the water boiler goes bust or the car’s engine falls out or you end up in hospital. The lastest blackberry is not an emergency. Note: Pay off the small debts to have more money for the bigger debts. Save about 10% of your salary and invest 10% of your salary. This should be part of the budget but you know just how bad your credit looks right now.
STEP 6. BE DISCIPLINED
Right now I need a drink.
Since you already decided to make a start and you’ve done steps 1 – 5 you might as well go the whole way. Involve someone you trust to help you stay on the straight and narrow. ( I personally, handed over my store cards to friends I trust and I’m almost debt free) but you can speak to a partner or your dad. Don’t ask your mom because she’s hates seeing you go without nice things and she’ll never actually check those statements the way a man would. I love my mom but it’s true.
AND discipline means you will be strong and admire but then move on and once you have that down you’ll become a super bargain hunter and no – sales at boutiques don’t count!
STEP 7 : GOLDEN RULE
Don’t make debt, to pay debt.
See, easy.Now I’m find my purse.