Here are 7 small steps you should take in getting rid of debt and not adding to that which you have.
Debt can be good when you are leveraging it to create wealth, like buying property for rental purposes. However, most people get into the bad kind of debt because they just fail to either plan and budget they money, or are unable to leave within their mean.
Pay off debt systematically
List your debts from the largest one to the smallest. Start by paying off the smallest one and once that is done, move on to the next one on the list.
It is better to own a pre-owned car, debt free than to pay monthly repayments stretching multiple years into the future. The timing of purchases should be based on increased wealth, not increased debt.
Hold Occasional Garage sale
Periodically sell items that are no longer of use in the house or in your life. This can be a yard sale you have once a month to sell items like books you have finished reading, your children’s baby clothes that are still in good condition, ornaments that you don’t use anymore etc. Small boutiques will on-sell for a small commission.
Eat out less
As much as there are cheaper places (than most) to buy food, out there, remain vigilant in this area. It’s very easy to spend money on food when there’s already food. Buy what is needed and try to include all of the necessities in your grocery list.
Don’t go crazy at Christmas
Do not let the celebration of the season demolish your financial sense. Let the gifts go according to the budget. One can still enjoy the festive season without having to injure your budget.
Many people use the festive season as an excuse to spend uncontrollably. Many drink and shop their senses away and come January, people are having trouble buying school uniform, stationary or even school fees for their kids.
Don’t carry a lot of cash
The more cash you carry, the more likely you are to spend it. It is very tempting having cash in your pocket. One is highly likely to spend money if it is in the form of cash rather than credit card.
Watch out for addictive behaviors
When in debt, identify behaviors that put you in that situation. Eliminate them and avoid going back to them. There is no surer path to financial ruin than enforced spending driven by an addictive psych.