Most of us have been in debt at some point and it shouldn’t be surprising how easy it is to have sustainable debt quickly turn into unsustainable debt. All it could take is for you to unexpectedly lose a job, or a member of the family becomes ill and requires care and support. It can happen to any of us. There are many ways to get out of debt, from simply cutting back and slowly paying it off, to more organized methods such as debt management plans or even bankruptcy in extreme cases. But no matter how you get out of it, sorting out your financial management and planning afterward is key to not getting in trouble again.
It sounds obvious but the number one rule is don’t get back into the kind of debt that got you into trouble in the first place. If it was a car loan or expensive lease, then buy an older second-hand vehicle. Or if it was credit cards or overdrafts then save up for things rather than use credit.
Look at your outgoings and assess whether there are regular outgoings that are either unnecessary or have cheaper equivalents available. One important exercise is to go through your bank statements and see what regular direct payments are coming out, are there memberships or subscriptions for things you don’t use? Also, are you overpaying for things like insurance?
You can always invest money and there are so many different ways to do it these days. One new investment opportunity that many are taking advantage of is the emergence of crypto currencies like bitcoin, you can easily buy these online and even use a PayPal to btc site to buy from anywhere in the world.
A good habit to get into is putting something into savings whenever you get paid. It doesn’t matter if it’s monthly or weekly pay and even if it’s only a small amount as once you do this as a matter, of course, it will slowly add up giving you a safety-cushion in your bank account. If you are tempted to spend this money then consider using a savings account where the money is not instantly available to transfer into your current account, this could be an account where there is a transfer time or with another bank so it’s not on the same online banking as your regular accounts.
One sure way of saving money is to clear your mortgage faster which is beneficial in a couple of ways. Firstly, and most obviously, a mortgage is a debt and if you are out of a debt then you don’t owe it, simple! Secondly, the quicker you pay off debt then the less interest you will end up paying over the term of it. Most mortgages have a facility to make extra payments as often as you like but check with your provider on how to do this.