In part one of this guide we looked at a few ways in which you can begin to live a debt free life. It is important to have a full understanding of your debt in full, as well as all other outgoings and incomings each month. By preparing a spreadsheet you can see the bigger picture and create a strict budget that is realistic and manageable each month. From here, you can begin to pay down debt in a more effective fashion and live your life in a way that promotes healthy financial activities.
Let’s carry on with the guide on how to become debt free.
The next phase to your quest to become debt free involved creating a system whereby you are less likely to miss a payment, or be late paying back an expected repayment on a line of credit. Automate payments to your debt through direct debits or standing orders. That way you can either pay the minimum amount each month (or a set amount in the case of a standing order). This ensures that you never miss a payment.
One option put forward in part one of the debt free guide was to take credit card debt and transfer it to a 0% balance transfer card, to cut down on the amount of interest you are paying on your debt. In some cases a personal loan might be a better option to consolidate all of your debt in one place. It has a set end date, which provides you with an exit point, rather than a credit card that you could just keep using whenever you wish – adding to the existing debt you are trying to pay down.
It is difficult to remain motivated when trying to pay off your debt over a set period of time, but there are ways in which you can. Set realistic targets with little gifts and incentives to yourself along the way – such as a meal out at a fancy restaurant, or a small gift. Remember, that it is not worth getting stressed over your debt and there is no debt problem that can’t be solved.
With payday loan lenders, and other form of credit lines, you can gain debt advice and support from your contacts, if you are worried about your debt becoming a problem, or that you are unable to make your next payment. The sooner you act, the better for you in the long-term.
Remember, there are countless lines of credit open to you, and not all are bad. Responsible payday loan lenders do exist within the marketplace, offering short-term loans and instalment loans that are of great use to prospective borrowers, without adding a hefty level of interest or creating a big snowball of debt that is hard to get out of. Since the FCA regulations in 2014 the industry has improved its customer service standards. Always be aware of your debt, and ways in which you can pay down your debt to remove it from your life, including any payday loans and instalment loans that you are considering applying for through responsible payday loan companies.