March is Credit Education Month and I figured there was no better way to honor it than with a few tips on getting rid of that ugly monster that follows us around. You know what I'm talking about, the debt monster.
The truth is, pretty much everyone has debt of some kind. What's most important is that you take the right steps to manage and pay off the debt you have. That's why I have put together a few tips that have helped me get on track to a life with less debt.
Know what you owe- First thing first, you've actually got to commit and put down everything you owe on paper. Trust me, I know that it can be a little scary, especially as someone who recently graduated from college, but this is a very important step in getting rid of your debt. Knowing exactly how much debt you have is completely different than having some kind of idea of much you owe. Although sitting down and adding up all of your debt can feel a little overwhelming at first, it's the only way you can successfully start taking the steps to a better debt-free future.
Create a budget- After you realize exactly how much debt you have, you've got to think about how you can start paying that amount off. The best way to do this is through a budget. If you're like me you may not be very good with numbers, but don't worry because there are plenty of free websites and apps out there that are easy to use and made just for budgeting. Once you choose a secure tool to start budgeting you will be able to set goals to start paying off your debt.
Make goals and stick to them- You don't want to make goals that are unrealistic and hard to reach, but instead set goals for yourself that are smaller and easier to obtain. Start by paying off the smaller amounts first and then move on to the bigger debts. Be sure you're not just shifting you debt around, instead pay off what you owe, don't just move it from one card to another. Once you have paid off a credit card, stop using it.
Cut back on your spending- This may be a hard one, but you've got to tell yourself no. Even though that must-have item just went on sale, you have to hold back the urge to buy it. If you truly want a healthier wallet it's important that you cut back on your spending – that means getting rid of the not-so necessary items. You'll be surprised at how much money you save just by getting rid of things like small monthly subscriptions and services; these things really add up.
Stop swiping- If you need to buy something, buy it with cash rather than a credit or ATM card. One thing that I have noticed is if I commit myself to only spending cash I save a lot more money. Electronic money is far too easy to spend because when you're swiping you may not realize exactly how much you're actually spending until you look at your statement.
By following these tips, you can get on the right track and pay off your debt. Personally, this has been an eye opening experience; it's surprising to see how the little things can add up.