The debt dilemma – How to escape debt
Being in debt is stressful and it’s easier to get into debt than out of it. Help yourself with these five top tips.
Budget – It sounds obvious, but an astonishing number of us don’t know what we actually spend each month. For two months write down every outgoing and you might be surprised at how much of cash you fritter away.
Make a list of regular commitments – utility bills, mortgage, outstanding loans etc.; a list of necessary evils – petrol, train tickets etc; a list of desirables – holidays, salon trips etc.; and a list of non-essentials.
Boost your cash – This can be done in two ways: Cut all unnecessary expenditure or increase your income. It might not be a good time economically to ask for a pay-rise, but could you take on some extra work in return for a little more in your pay packet? What about selling your unwanted items on eBay, or even starting your own little business using a skill or hobby you already have, such as sewing, baking, computer or language skills?
Use credit cards – Yes, you read that correctly. If used wisely they can be a helpful cash-management tool. With some cards you get cash back for spending. So, by putting your regular expenditure, such as groceries, on your card you can earn money. Only do this if you are prepared to pay the balance off in full after the grace period (generally 30 days).
Save don’t spend – Any surplus cash should be saved. Allocate some for holidays or other desirable items, and some for emergencies. If any is left over it can be put into a longer-term savings account.
DIY – Often we pay people for services we could easily manage ourselves. Try washing your own car or making your own packed lunch for a month and see how much you save.
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