The economic recession has not had much impact borrowing and lending; in fact, lenders are still providing £170million to borrowers each day, and borrowers will pay more than £262million in interest that same day. The debt crisis is booming – and as the national debt grows, so does our personal debt.
There are enough salesmen tactics and borrowing breakthroughs to easily get you into to debt, but are there enough to get you out of it? Here, we list five easy ways to pay off debt quicker:
‘Snowball’ Your Debts
You may have already heard of this method but we’ll just give it the quick run through. Snowballing your debt is not the quickest solution but many have sworn by this method. You should first calculate all your minimum repayments on credit cards, loans .etc and note them down. Then, put each debt in order of interest, the highest first.
Minimum payments guarantee you pay the most interest for the longest time. You don’t want to drag debt misery on, but you don’t want to choke yourself financially. By snowballing debt you pay the minimum amount on the lowest interest debts but pay more than the minimum on the highest interest debt. This will clear the most expensive first and you can move down the list, with less to pay out each month.
Add to Your Income
No one really likes the thought of working two jobs or a bit of overtime. When the bite of debt does finally sink in you may find this the most suitable option. Use your skills – if you’re already working as a designer, try working freelance at home for one-off projects. If you’re particularly good at handy work, offer handyman services for a small fee. You don’t necessarily have to get an additional weekend 9-5 for extra cash flow.
Pinch the Pennies
Buying lunch at work can cost £5-£10 per day. By making food at home and buying ingredients yourself, spending an average of £6 per week, you could save an additional £4 a week (£192 per year). Apply this simple principle to other aspects, such as buying fresh instead of ready meals or using the local market were prices are a massive 70% cheaper than supermarkets.
Don’t hide your debts or hide away from them, hide your money, so to speak. If you want to save the wonga take it out of an account used daily, as you are more likely to spend when you see an account balance of £1000 and use what you intended to save. Invest in a savings account if necessary.
Don’t Be Afraid to Ask For Help
Use online debt calculators to help provide a rough idea of your outgoings and keep track of your money and debts with simple spreadsheets. Use online advice forums for quick tips and guidance. Keeping debt a secret and refusing help is definitely a bad idea; debt advisers, online money tip forums, debt management or even family members can provide an essential confidence to knock your debts on the head and speed into clear skies.