Smart And Easy Tips to Get Out of Debt

By BankBazaar | October 14, 2017

Getting out of debt is easy. All you need to do is focus on clearing your debt as soon as possible. Here’s how you can do just that:

  • Acknowledge your debts

The most important thing is to acknowledge that you need to get yourself out of debt. Don’t hesitate to accept it. Nobody’s judging.

  • Get a clear idea of your monthly cash flow

It’s always a good idea to carefully monitor your cash flow on a monthly basis. Create a budget for yourself. Make an effort to stick to your budget. It will help.

  • List your debts and prioritise

Grab a piece of paper and jot down all the loans and debts that you have. Once the list is on paper, prioritise and set target dates to close each debt. This will depend on how much money you can save towards repaying these debts.

Ever heard of good loans and bad loans? We’ll tell you what these are. Got a Home Loan or an Education Loan? These can be classified as good loans because they have lower interest and tax benefits

Do you have an outstanding Credit Card balance? A Personal Loan? These are generally considered bad loans because they have high-interest rates.

  • Have any idle money?

If you just got your salary bonus, think about using that windfall to clear at least some of your debts.

  • Set a Debt Free Day

Add some excitement to your pet project of getting out of debt. Set yourself a ‘Debt Free Day’. That’s the date in the calendar by which time you should expect to be rid of your debts.

Tell a close friend about your plan. They can keep a check on your progress and help you stay on track. Stay motivated to become debt-free. Don’t get derailed along the way.

Additional Reading: Drowning in Debt? What NOT to Do To Stay Afloat

Once you are debt-free, you can focus more effectively on other financial goals and take your first steps towards financial security.

Need more financial advice? We are here to help.

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