When it comes to financial advice, there are so many websites out there. It can be overwhelming deciding which bits to follow, and which bits to ignore. What everyone really needs is some simple rules that are easy to understand and easy to carry out, and that will help you reduce your debt amount to zero. Read on to find out more.
Rule one: Pay off one debt at a time
So, this is an easy and simple rule that laws of people get wrong. Like anything in life you may think that you are able to do two things at once, but actually, it's better to focus on one at a time. The same applies to your debts. Why pay off half of the balance in one debt and half of the balance on another when you could complete wipe one out? That is why it's important to pick the one that is costing you the most to sustain, and run that one down to zero first of all.
The only time when this isn't appropriate is when you have lots of debts that you can't afford to make the minimum payments on. Meaning you will end up defaulting on them. In that case, you can do things like consolidate debt, instead. Which means your bills will get paid every month, but you will only have one payment to worry about.
Rule two: Balance in and outs
Rule two is an oldie but a goodie. To wipe out your debt and stay debt free, you have to balance your incomings with your outgoings. If your outgoing are more than your incomings, you will need to make some cutbacks somewhere.
Sometimes it seems like everything in your outgoing list is essential, but often it isn't. You can save money all over the place by doing things like reducing your family shop costs, or mending clothes instead of buying new ones.
Rule three: Sell it
Rule three is that so many people are sitting on money they don't realize they have. People have all sorts of items in their house and garage that they don't use anymore, that are worth something to someone else. It can be shocking how much some things will sell for even if they are second hand.
If you are struggling with debts, it's always worth doing a quick sweep of the house and the yard. Look for anything that you no longer user that could raise you some capital. Remember even if you make a few hundred dollars, it is worth it. As that can take down your monthly payment on a debt and so make it much more manageable.
Rule four: Learn to say no
The last rule is a tough one. It's more about changing your perspective towards money than anything else. It’s about learning to say no. To yourself, to your other half and to your kids.
It can be so difficult to do at first. But stick to it as it can help you stay out of unnecessary debt, and have a healthier relationship to money and shopping in general.