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Lower your debt pile: The best New Year’s resolution by far!

Dec 15, 2016
Lower your debt pile: The best New Year’s resolution by far!

The new year is on your doorstep. And what better way to kick it off than with the best financial resolution in mind – lowering your debt pile. If 2016 left you flat broke and you feel defeated by debt, start visualising clearing your debt bit by bit in 2017. Wikus Olivier, debt management expert, shares a few handy tips on becoming a debt free consumer this coming new year:

A resolution means nothing without a budget

You’ve probably heard it a thousand times, but have you really taken a few minutes to set up a budget? If not, stop wasting time! Creating a budget will allow you to keep your spending in check. You’ll be able to evaluate your income and rank your expenditures to establish their relative importance. Olivier says you can draw-up a budget on a piece of paper, use an online template or even consider using an app (like JamJar or 22Seven). Choose the option that would work best for you and stick to it.

An important tip that consumers tend to forget when they compile their budget is, to do it with the help of their bank statements. Your bank statement clearly indicates how much money you spend and on what you spend it. With this in-depth overview you will see exactly where you can cut on unnecessary costs. These days, it has become too easy to use credit cards without thinking if you really budgeted for certain items. This is how you will prevent ‘saving leaks’. Make it your new year’s resolution to lower your debt pile and to avoid those ‘leakages’.

Make use of good spending habits

Change your bad spending habits by recognising it for what it is and by doing something about it. The daily coffees, bought lunches and retail therapy sessions are but a few habits that weaken your finances and add to your debt heap. Rather create good spending habits by cutting unnecessary expenses each month and instead saving for those unforeseen emergencies. Implementing these good spending habits on a regular basis will soon ensure that it becomes second nature and part of your lifestyle.

Live within your means

You only earn a specific amount of income each month. Thus, do not use your valued savings and credit cards to extend your earnings. This will cause you to buy more things than your income can allow and it will only contribute to deeper debt trouble. Close your spending circle. Determine how much is enough for you and stick to it.

Get rid of debt bit by bit

One of the smartest tactics to get debt out of the way is to make minimum payments on all of your debts and to make use of the so called snow ball effect. Choose the one account with the highest interest rate and focus all of your extra payments on paying that one off first. With these little and consistent steps money becomes available when you finish paying off accounts. You can then allocate the available amount to the next debt account. This will ensure that you become debt-free sooner than you plan or think.

By starting the new year off with a ‘lower your debt pile’ goal and to have this resolution in mind, you are in for a win. Use these tips to not only lower your debt pile but to also become debt free sooner. However, if you are currently stuck with a tremendous amount of debt and cutting back on costs simply isn’t an option for you; it is time to let DebtSafe assist you with their efficient debt review program.