5 things that you need to do in order to stave off debts

The following article highlights some tips that you should follow in order to stay debt free.

12:55 04 January 2014

Staving off debts can be challenging. Sometimes your lifestyle gets in the way of getting debt free.

A lot of things have to change in order for you to stay debt free and some of these changes may be very difficult to adapt to. Sure, you might take a few cutbacks but that is just a single step to ensuring that you are debt free.

It is agreed that the secret to being debt free is to be very proactive and seek cash to mitigate your circumstances.

1.    Find out how bad your problem is

Just like a doctor checks a patient’s history in order to get a feel for what he or she might be suffering from, so you should look at your finances in order to get a feel for how bad your debt situation actually is. Assess your situation to know if you are in a spot of bother.

2.    Craft a repayment strategy

One of the debt repayment strategies that you can employ is the debt snowball method. In this method, you just pay debts one at a time starting with the smallest. However, it is recommended when you have debts with high interest and those that don’t have early repayment penalties.

3.    Cut back your spending by 30 per cent

The reasoning behind this is that if you can cut back your spending and spend more time servicing your debts, you are one step closer to getting debt free. It is not going to be a very easy thing but it is very worth it in the long run.

4.    Sell things that you don’t use

You should try getting rid of some of your old stuff and use the money to service your debts.

5.    Earn more

If you have more money to spare, you can use some of it to service your debt.