PWS Group - Five Effective Tips to Rid Yourself of Debt

People of all ages find themselves in debt from time to time. From credit cards to loans and even mortgages, most people owe some money somewhere. Sometimes the debt can become too much, especially if you find yourself on the verge of being retrenched, then your income is going to disappear and paying back these debts is going to be even harder than anticipated. Also remember at any age, you want to be saving for your retirement, something you should be looking at from the day you start work.

Stop Borrowing Money Today

The very first step to getting out of your debt quickly is to top borrowing. Often you will find you use your credit card as you near the end of the month so you can continue your current lifestyle. Not using the credit card may mean you cannot go out this weekend or you cannot buy the new furniture you wanted straight away, but you won't be borrowing more money and therefore it will help you pay back the debt much faster in the long run.

Set Up An Emergency Fund

It's advisable to set up an emergency fund of around £500 that you only touch if there is a real emergency, such as your car breaking down or the boiler bursting. Up until now you probably relied on your credit card or overdraft for this or perhaps you opted for a short or longer term loan to pay the costs. This again results in debit. Having the emergency fund in place reduces the risk of you borrowing.

Set a Budget

Set yourself a budget to track your income and expenses. It's imperative that you stick to the budget in order to get yourself out of debt as quickly as possible. Knowing where you spend the most money and how to reduce your expenses can be identified by keeping a budget and then sticking to it.

Organist the debt you have

Organizing your debt is an important step to paying off your debts quickly. There are two ways you can do this, which you choose is down to personal preference. You can make a list of your debts based on the interest rate, so the one you are paying the highest interest rate will be placed at the top.

The second option is to list all your debts based on the highest repayment amount. So the one you are paying the highest monthly payment for you should focus on adding any additional cash (if they allow it). This means once that debt is paid off, you have that full monthly amount to pay into other debts, those with smaller amounts and so on, until all your debt is paid back in full.

Additional Tips

Remember to keep track of your spending and where you are paying more into which account, so that you can see your balance dropping. See where you can make some additional cash If it's coming up to summer and you want to spring clean, keep all good quality items to one side that you can sell. You can sell them online or hold a garage sale or take part in a car boot sale, depending on your preference. This additional cash can then be used to pay into one or two of the accounts to bring the balance down.