Living your life under piles and piles of debt is no fun feeling. It feels like your money doesn’t belong to you and you constantly have a source of stress. Gaining financial freedom is an important part of living a happy life, and paying off debt is a great way to get there.
You might have debt for any number of reasons: a student loan, a car loan, or credit card debt. If you’ve struggled with credit card debt in the past and worked with a Vanquis credit card, you should look into Vanquis credit card claims to find out if you are entitled to claim compensation.
However, if you’re still struggling to manage your debt, here are some ways to smash it as quickly as you can.
Reduce Your Spending
Of course, getting your spending under control is a crucial step if you have a lot of debt that you want to clear as quickly as possible. This is especially true if a lot of your debt is on your credit card and comes from impulse spending.
Take a look at where you can cut back your budget, even if it might require some tough decisions. Gym memberships you don’t use, three different streaming services and dining out twice a week are all expenses that probably don’t need to be in your budget.
Create a Budget
To manage your budget, you need to create one first. A huge mistake many people make with their finances is not making and sticking to a budget. Especially if you want to get rid of your debt, you need to learn how to create and manage a strict budget.
Consider your total income and how it’s spread across your needs, wants debt repayment and savings. Come up with a plan that makes sense to you and then stick to it.
Pay Off Debt Before You Save
A serious question is whether you should prioritise debt repayments or savings. An emergency fund is always good to have (and can help prevent more big expenses on your credit card). However, before you think about saving for vacations, new cars and other non-essentials, you should try to get your debt in order.
Clearing your debt as quickly as possible will allow you the financial freedom to save as much as possible once that expense is out of your monthly budget.
Pay More Than the Minimum
If you happen to have extra money in the bank, reduce your spending to leave extra room or get unexpected cash, do your best to put that money into your debt repayments.
Paying more than your monthly minimum will help you to pay it off quicker and seeing the numbers move will motivate you to get it done ASAP.
Use Cash Instead
Finally, if you’re weak when it comes to your credit card, it’s best to simply stop using it. Switch over to cash instead, and you’ll be limited to what’s in your purse.
This doesn’t have to be a long-term solution, but try this method out if you can’t get your spending under control and see if a physical limitation can help train you to spend more responsibly.