If you want to clear your debts this year but are drowning in a sea of store card or credit card debt, the ultimate debt checklist can help you to clear your debts quicker.
1. Facts and Figures
The first step to clearing your debts is to acknowledge them. Begin the process by creating a list of the debts you want to clear starting with the largest amounts. Note down all of the crucial information for example interest rates and minimum payments. Once you have created a list and know which cards should take priority it’s time to ask yourself a few home truths.
2. Take Action
So you know that you are struggling to make your monthly payments but do you know why? In order to take action against debt, it is essential that you know exactly how much money goes out of your account each month and what goes in. You could be in debt for a number of reasons but this will help you identify where changes need to be made. Are you currently spending more than you earn? Living beyond your means is one of the main reasons that debt can mount up and is often one of the hardest habits to break. However, there are a number of ways in which you can cut back, freeing up more money to pay off your debts.
3. Cut Back
Once you know how much debt you are dealing with, it is time to highlight possible areas that you could potentially cut back on. Go through your current direct debits and decide if each one is absolutely necessary. Do you really need that magazine subscription or the gym membership that is burning a hole in your pocket each month? You can save hundreds simply by revaluating your digital TV costs, energy and phone providers.
4. Get More for your Money
When reviewing your finances, this is also a great opportunity to make sure that you are getting the most for your money. Now is the time to make sure you haven’t overpaid tax or paid too much in bank charges.
5. Sell Sell Sell
Do you have old clothes in your wardrobe that you no longer wear? Do you have an old mobile phone lying around? There are many online sites that make it easy to sell your possessions online for cash. In most cases all you will need is the internet and a PayPal account.
6. Tackle Debt Head On
Cutting costs can help you on your journey to become debt free but tackling debt head on will make the biggest difference. If you’ve tried everything but you are still struggling to pay off your debts, seek help from the professionals. A debt specialist will tailor a debt management plan to suit your specific needs and take the pressure off. If you would like to find out how you could become debt free in 2013, Sanlam Private Investments and debt management services can help you take the next step.