Feeling bogged down by persistent debt? Was one of your New Year’s resolutions for 2015 to eliminate your debt? Setting a debt clearance goal for the year can serve as quite an inspiration. It’s imperative to leverage this spirit to create a robust debt reduction plan early on. Not only can the following tips assist in accelerating your debt eradication this year, but seeking advice from professional debt counselling agencies like Debt Rescue is also a wise move.
CEASE DEBT ACCUMULATION
It might sound evident but halting the accumulation of debt is the foundational step towards debt elimination. It’s like trying to solve a problem with one hand while exacerbating it with the other. To genuinely commit to debt elimination this year, take control of your spending habits. Ensure not to add to the pile of debt you’ve pledged to eliminate. This involves careful monitoring of your expenses to ensure they are within your income limits and ideally, a little less.
UNDERSTAND YOUR FINANCIAL HABITS
Spend a month or so tracking your expenses, including every cash withdrawal from the ATM and every cash purchase. Jot down all expenditure, so you have a comprehensive record of your monthly spending. Knowing your spending habits will give you insight into where your money goes and help identify major discretionary expenses.
CREATE YOUR STRATEGY
Once you’ve determined where your money goes, strategize ways to curtail expenses, allowing for a surplus. Yes, it’s time to create a budget (predictable, isn’t it?). Don’t be overwhelmed; a budget is merely a financial plan, and you can rename it to something less daunting if you wish. Crafting a plan that leaves a little ‘extra’ money after covering all basics is essential. This ‘extra’ needs to be directed towards the debt you aim to erase. You can keep some non-essentials if you like, but remember, the more you put towards your debt, the quicker you’ll dispose of it. So, decide how aggressive you’re willing to be.
STAY COMMITTED
Adherence to a debt reduction plan is often the hardest part, but that’s the challenge you accepted when you made your 2015 resolution. Imagine the sense of achievement and freedom from not having to worry about clearing this debt. Invigorating, isn’t it?
The fastest route to debt elimination entails a strong financial plan (or budget), a resolute mindset, and high self-discipline. If debt eradication is one of your 2015 resolutions, making that pledge is the first step towards accomplishment. Persist, and your finances will undoubtedly reap the benefits in the long run.
Do you have any viable methods for hastening debt elimination this year? Share your wisdom in the comments below, for the benefit of others.
