How to Pay Off Your Debts Fast

How to Pay Off Your Debts Fast

By Chris Jenkinson

Are your debts dictating your happiness in life? If you are living pay to pay and are tired of living with debts and interest eating up a major portion of your wages, you can make a few quick decisions that could have a lasting impact on your finances — in a good way. Here are some tips:

Cut Up Your Cards

Credit cards are nice in theory but in reality are dangerous in the hands of someone struggling financially. It’s so tempting to use them to buy what you want and even what you need but the reality is that when you live with the credit cards at the max, your monthly payment isn’t ever going to make a dent in the debt. The best way to get debt-free is to live on a cash only budget.

Live on Cash

Cash is king; it’s true. Not only does cash buy more for your money (because you won’t be paying interest and convenience charges) but once you pay for something, it’s yours. No chance of being repossessed and zero chance of you paying more than the ticket price because unlike the people who buy on credit, you know precisely how much things will cost you. There’s a big error that many credit card holders make. That is buying things on sale with their credit card. Unless you are willing to pay that item off in full on the statement due date, you will pay more than the regular non-sale price because of the interest accrual.

Make a Budget

Budgeting is the best way to make money last all month. You need to realise every pound on that budget and account for it. If you don’t have money to get a takeaway for dinner, don’t do it. Ask your budget first! Account for every bit of your spending, your debts repayment, and your savings. Make certain that part of your budget includes debt repayment. Minimum payments are not enough. You need to be aggressive to get rid of those high payments.

Put Money Away

Paying off your debts fast is a good idea. It will result in your having more of your own money to live on. As you pay off debts, take money that would have normally gone to a credit card or loan payment and put it away for the future. Too many people just absorb extra money into their spending money. By all means, celebrate on occasion and live a little but account for that celebration money as part of your budget.

Set Goals and Measure Them

By setting goals, you’re more likely to attain them. It is not enough to say you want to be free of debts. By making a workable plan and sticking to it, you have a great chance of reaching success sooner. Don’t hesitate to get help getting debt free. There are many services that are designed to help.

Compass Debt Counsellors can give you valuable advice that can help you pay off your debts.

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