Debt is a part of life for most young professionals, and for many of us, we dream about the day of being debt free. Adopt a lifestyle of being motivated to get out of debt with these tricks. A small shift in habit or mindset can go a long way!

Make a Budget

Nobody likes to build a house without having a solid plan. The same concept applies to your finances. It’s so important that you write down how much income you have and what expenses you are paying. When you do this, you can then look at everything objectively. Think about it, do you really need to have all of those subscriptions? Do you need to spend so much on shopping? What about that old gym membership you’re still paying for? By going through all of this, you can then begin to cut down on your outgoings as much as possible, which will free up more money in your budget to pay off your debt.

Don’t Live on What You Have in the Bank

You should never live on what you have in the bank. Instead, base the decisions you make on the financial plan you have. For example, if you know that you have some extra in the bank then you may be tempted to treat yourself and go shopping. If you do this however then you may not be making as much progress with your debt. A good rule is to always work from your budget. If your budget for that week doesn’t allow for a shopping spree then don’t do it, even if your bank balance is looking promising.

Build an Emergency Fund

As mentioned above, it is important that you work from your budget. If you do this then you may have some money left over at the end of the week, which you can then contribute to your emergency fund. A good emergency fund has 3-6 months of expenses. By doing this, you can help to stop yourself from getting into more debt and it also gives you some direction in terms of your finances. If you do happen to experience an emergency and can’t pay for it out of pocket, then don’t neccessarily jump to put it on your credit card. You could consider cash advance loans. They are easier to pay off and it will probably come with a lower interest rate, as some credit card interest rates can be in the 20% range.

Debt Snowballing

When you have your finances on track to some extent, you can then use the debt snowball technique. This is when you compile a list of the debt you have, from the smallest to the largest. A lot of people think that they need to pay off their biggest debt first, but this is not the best way for you to achieve financial freedom. Instead, you need to focus on paying off the debts that have the highest interest. When you do this, you can then gradually free up more and more money, while also experiencing less charges. This will then give you the chance to tackle your other debt much more efficiently. The best thing about this method is that it gives you a light at the end of the tunnel. It is very easy to start seeing results, and it will also have a positive impact on your budget.  With every debt you pay, you get more and more money to pay off the rest.

Stay Focused

A lot of people struggle to pay off their debt because they find it hard to stay focused. This is understandable because you may get sick and tired of not being able to treat yourself all the time. You do however need to remember that this is only temporary and that it won’t be like this forever. When you are able to focus on this, you can then begin to see the bigger picture and this can work wonders for your motivation. If you are having a really hard time clearing your debt or if you just can’t find the money you need to pay it off then it is always a good idea for you to chat with a financial advisor. They can work with you to make sure that you are making the best choices and to also explain the options that are available to you if for some reason you don’t make a payment on time. Arming yourself with the right information is always a crucial step when tackling debt, and it can also help you to become more aware of the position that you are in so that you can actively deal with it.

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