Few people these days get to experience debt-free living, but it is a goal worth working for. One of the secrets to getting there is using your personal creativity, the other two handy-to-have weapons in your debt-fighting arsenal are: energy and discipline. Here are some ideas to get you going.
Make more money
With the world online, and everybody trying to save a buck, there are a surprising number of ways to bring in a little on the side. Small amounts used to pay off your debt, month-on-month, will eventually grow up to be larger amounts, and you’ll knock years off those debt repayments.
- Get a salary increase If you research the best way to go about this, and get past the stress of the task, this is one of the easiest ways to up your earnings and pay of your debt.
- Offer to take up the slack at work. Negotiate an hourly rate for taking on extra projects at work that are outside your usual duties, or ask to work an extra shift. This works particularly well for workers paid by the hour.
- Turn a hobby, or skill, into cash. Can you install a satellite dish or fix a toaster? You could offer part-time maths or English tuition if that’s your area. Your local eatery might be happy to buy your delicious homemade cakes or you could put your computer skills to work by giving starter lessons in popular software packages to people in your community in the comfort of their homes.
- Let your friends know. Let people in your social network know that you are looking for extra work. Most of us still prefer to deal with people we know so never underestimate the power of word-of-mouth when setting out to earn some cash on the side.
Cut expenses
If you don’t have the time or energy to take on extra work, another useful way to pay off your debts is by reducing your expenditures.
- Hire a tax consultant or speak to a registered financial adviser. Do you know if you have any tax credits due to you, which deductions you’re able to claim and what tax cuts your eligible for? If you’re not completely sure, it’s worth speaking to someone who is.
- Paying gym membership, but never go? You would be surprised what you could save by cutting the fat. Cancel all the subscriptions and memberships you can do without and save yourself a packet. Check your credit statements for anything you’ve missed.
- Take public transport or carpool. Transport costs are on the rise everywhere but taking a bus or train is still far cheaper than hopping into a car. If you have to use the car, share the cost of fuel by carpooling. Walking and bike riding are the cheapest way to go and your health will benefit in the long-run which, in turn, means fewer medical bills.
- Cut down on entertainment. One of the biggest areas of money wastage in households is entertainment: movies, restaurant meals or take-out, lattes, DVDs and clubbing. Find cheaper and creative ways to keep yourself occupied or cut back on how often you indulge.
- The grocery challenge. Food prices continue to soar so set yourself the challenge of reducing your grocery bill by a small amount each month. If you haven’t noticed what was missing, challenge yourself the next month to bring that bill down by another small amount. Find websites and television programmes that inspire you to cook budget-friendly, healthy and delicious meals that trim down your debt and your waste-line.
- Have fun bartering. Before our ancestors became part of a money-driven society, they were very good at bartering. Give it a try. Look after the neighbour’s kids if he changes the oil in your car, or clear out Bob’s gutters in exchange for Bob’s bookcase building skills. It can be fun and you’ll also get to know your neighbours.
- Cash discounts. Don’t be shy to ask for a discount if you’re paying cash. Many medical practitioners are happy to give up to 10% discount for immediate settlement of an account. Also, keep in mind that if you pay off more quickly short-term personal loans, like those offered by wonga.co.za, you will pay less in interest.
Educate yourself about your finances
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- Increase monthly payments automatically. This is the slow-and-steady approach to paying off debt that will require some discipline in the beginning but is a good habit to instil.
- Pay the debt with the highest interest rate first. Regardless of the total owed on a debt amount, pay off the debt with the highest interest rate first. This will, of course, be in addition to paying the minimum amounts on any other debts.
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