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Tolu Frimpong offers seven tricks to pay off your debt faster and more effectively.
Debt is a prevalent issue today, with the average non-mortgage debt in the UK standing at a staggering s £16,200.
It’s a problem that affects millions, and breaking free from its grip is crucial for a brighter financial future. This article explores seven practical tips to help you pay off debt fast.
1) The power of a budget
Budgeting is not just a nice-to-have; it’s your guiding light towards debt freedom. Create a detailed plan for how you’ll allocate your income. Categorise expenses like food, housing, and transportation, and stick to your budget diligently. This approach ensures you’re making the most of your resources, and you can identify gaps in your income to put towards debt repayment.
2) Reduce non-essential spending
Distinguish between essential and non-essential expenses. Be ruthless in categorising non-essential spending and cut down on them. It’s easy to justify the costs, but this mindset only prolongs the path to debt freedom. By auditing your expenditure and focusing on essentials, you can create additional buffers for debt repayment.
3) Generate extra income
Making extra money is a crucial step towards achieving debt freedom. It’s an opportunity to accelerate your journey by increasing your income streams.
Consider exploring side hustles or freelance opportunities that align with your skills and interests. You can also think outside the box and explore unconventional income sources.
For example, renting out a spare room on platforms like Airbnb, monetising a hobby, or participating in market research studies, all of these sources can all contribute to your extra income goal.
By setting specific income targets, you transform the process into a challenge. This approach adds an element of excitement and motivation to the task. Whether it’s making an extra £200 or £300 per month, having a clear goal encourages you to seek out opportunities to boost your earnings actively.
4) Embrace accountability
Embracing accountability on your debt-free journey will help accelerate your debt repayment progress. Sharing your plan with a trusted friend or partner who genuinely cares about your success can make a significant difference.
This person should be willing to ask the tough questions and offer valuable insights. They become a source of support, helping you stay disciplined and motivated, especially in challenging moments.
Having an accountability partner will transform your financial pursuit from a solo effort to a shared mission. They celebrate your wins, provide encouragement, and offer guidance during setbacks.
This mutual commitment creates a strong sense of responsibility, significantly increasing your chances of achieving your debt-free goal.
5) Leverage overpayments
Instead of sticking to minimum payments, consider making overpayments on your debts. This tactic significantly reduces the overall interest and gets you closer to debt freedom faster. Even small overpayments can make a substantial difference in the long run.
6) Turn your clutter into cash
Turning clutter into cash is a smart move on your path to financial freedom. Take a moment to assess your surroundings – chances are, there are items you no longer need or use. By selling these possessions, you declutter your living space and generate extra funds for debt repayment.
Platforms like Shpock, Facebook Marketplace, and Vinted provide convenient avenues for selling pre-owned items. It’s a win-win situation – you clear out your space while putting money in your pocket.
Remember, what may seem like clutter to you could be a valuable find for someone else. This process not only aids in your debt-reducing efforts but also promotes a more minimalist and organised living environment.
7) Consider a change of scenery for financial relief
This last tip may sound extreme, but it would be very financially savvy if you could pull it off. While it may be a tough decision, considering a change of scenery can be crucial to becoming debt free.
Sometimes, relocating to a more affordable area can significantly alleviate your financial burden. It’s important not to let sentimentality or emotional attachments to your current location hold you back from making this necessary change.
Moving to an area with lower living costs could save you substantial money on housing, transportation, and daily expenses. This shift can free up funds that would have otherwise been tied to high living costs, allowing you to redirect them towards debt repayment.
Additionally, it opens up the possibility of exploring new opportunities and experiences in a different environment. While it may be a challenging adjustment, the financial relief and potential for a brighter future make it a strategic move towards long-term financial well-being.
Photo Credits: Pexels
Tolu is a Money Coach and Content Creator, passionate about helping others break the payday-to-payday cycle and achieve their financial goals, through the power of intentional budgeting, saving and investing. When she’s not talking about money you can find her spending time with her 3 boisterous boys.