Having debt hanging over you is a little like that post-Christmas weight gain – something we’d all like to get rid of as swiftly and painlessly as possible. With commitment and initiative, reducing debt need not be a big deal. Here are five ways to help you reduce any crippling debt.
Write it down
Creating a list of monthly or weekly expenses is the first step to knowing exactly what you’re money is doing and where some cuts can be made. You can do this in a notebook or get a little more technical by embracing spreadsheets. Either way, it’s a vital process as there will likely be some surprise expenditure and unnecessary items where the money would be better utilised by going towards your debts.
Trim the fat
With your trusty notebook in hand it’s time to trim the fat from your expenses. A little pain now, like foregoing that barista-made daily coffee, equals big gains later. The aim of the game is to go after your most expensive debts first – the ones that don’t have any perks, like tax write-offs.
Credit cards have the highest interest rates and a number of fees. By doing something as simple as putting your weekly coffee expenditure towards your credit card debt, you can shave years off the repayment time.
Set a budget
If you work hard to set a budget on your weekly grocery shopping trips, you can end up saving a lot of money. When you shop for specials and seasonal produce, you have the room to create some delicious home-cooked meals. Not only will you save some money, but you will enjoy creative, healthier dishes as well.
Most of us have way too much stuff tucked away in our homes, so if you’re looking to free up some cash to reduce debt, it’s time to pare back on your items. From selling your designer wardrobe items on Ebay to listing that XBox in the local classifieds, you can recoup a lot of money by getting rid of extraneous matter.
There are some really clever ways to increase your income and drive down your debt. Picking up an extra job may seem like the most common of all, but what about setting up an Ebay store, doing some freelancing on the side or, even better, putting your money to work for you?
Through something as simple as making your money work hard on the stock market or through currency trading, there is the potential to reap some great returns even on a small investment. Currency trading, also known as forex trading, involves the buying and selling of foreign currency. A number of expert companies like Learn to Trade guide you through the process. It’s a great way to potentially make money without having to physically work.
Like most things in life, reducing debt is about committing to meet a goal. By knowing your constraints, working within a budget and increasing your income, it’s a highly achievable outcome.