Every single person will have some form of personal debt and be looking at ways to bring it down over time. This could be personal loans, credit cards, payday instalment loans, mortgages and other forms of debt. In order to stay mentally healthy and to look after our finances in a sustainable way over the course of our lifetime it is vital that you know how to rid yourself of your debt and to be effective in making sure it is the long-term solution you are seeking.
Work on your smaller debts first
It is so hard to stay motivated when you are paying off a large amount of personal debt. If you have multiple debts that all require repaying each month it is disheartening to see them all roll on into the future. One way to stay motivated and to witness real progress is to focus on paying down the smaller debts that you have active, even if that means leaving the higher interest, and larger, debts active for a little longer. This is because psychologically it is advantageous to remove as many debts as possible, so that by the time you are left with one larger debt to pay off, you know you can achieve it, as you have already rid yourself of 2 or 3 other, smaller debts.
Think about a mortgage
A lot of young people think that there is no chance of them easily getting on to the property ladder, but they are also constantly being told by the older generations that by throwing money at renting their homes they are wasting money. This isn’t necessarily true. If you have personal debt, why tie yourself down to a much larger, and longer, debt in a mortgage. Instead, renting should be viewed through a much more relaxed prism. Renting provides you with the flexibility of taking up an exciting job prospect elsewhere, without having to sell your home. It also allows you to forget about the worries of maintenance costs as this is down to your landlord.
No worries having multiple store cards and credit cards
This might seem counterproductive in terms of removing your personal debt but in terms of helping you build a positive credit score and history having multiple credit cards is a big help. Of course, this only works if you are religiously strict about paying off the balance on each card, each month. One tip that helps people build a good credit score is to use your credit card to pay for your groceries each month, having the cash ready and available to pay off the balance come the end of the month.
When a payday loan is reasonable
There are some cases where it is completely reasonable to look for external help and to take on more debt. If you are faced with an unexpected situation that you need to resolve immediately but you do not have the cashflow, BUT, you know that you can afford to pay off that debt when you next get paid, a payday loan is a sensible option. You should only ever do this though if you know for sure you have the financial means to pay it off when you say that you will.