At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
In today’s blog post we share with you what we think about what you should do when it comes to getting out of debt.
How does consumer debt work?
Debt is an absolute passion of ours, an absolute passion because we are watching it drag down society.
Essentially, consumer debt is too easy to get. We understand why it exists, it’s because merchants want to sell their wares. If no one’s got any money, they borrow some, and they come and buy it. Once they have sold the item, it doesn’t matter.
Then you have to carry that debt around.
Tip number one: No more debt
The first tip is no more debt, no consolidation loans, no AfterPays, no store cards, no credit cards.
If you’re using debt in that way, you are simply living outside your means and it will never ever, ever, ever end well, you are spending more money than you make.
You should have a little think about why you’re doing that. If it’s to keep up with the Joneses, it means you care too much about what other people think.
Tip number two: Live within your means
Stop caring about what other people think, stop spending more than you make, and stop living outside your means.
Otherwise, you’re always just going to be in this position, paying back your debt.
Tip number three: Paying back your debt
Get out an excel spreadsheet and line up all your debts from smallest to largest.
Start setting up the minimum payment, which you probably already do on all of those debts, and then use a budget.
Find a surplus and cut some things out of your life that you just don’t need. Think unused gym memberships, unused subscriptions, etc.
So now you’ve got some extra money.
Then you smash as much as you can on that smallest debt, when it’s gone, continue that same payment, and add as much as you can on the next debt while continuing to pay the minimum on the others.
When that’s gone take the collective of all those payments that you’re doing and the extra that you can find and put it on the next debt and then the next debt.
It might take you a year, it might take you two years or even three or four, but at the end of it, you will be debt-free.
You’ve learned to budget because you had to create a surplus. You’ve learned to live without less because you had to, and you’ve learned to pay back your debts.
When you get to the end of that, you’ve got all this spare money now and what we advise our clients to do, is to start learning how to invest with us.
Then you’re taking the money that you were giving to someone else and you’re keeping it and putting it to work.
It’s called the debt snowball, get in touch with us and we are happy to help you with getting rid of debt.
That’s a wrap
So what do you think? Will you give these debt-saving tips a try?
If you need any financial help or advice please get in touch with us at Super-Advice.