Are you looking to fix your financial situation and get out of debt? Here are some great tips for doing so.
Essential tips to follow
1. Cancel all credit card accounts if possible
In addition to debt consolidation, reducing the number of credit cards in your name to one or none (cancel those with zero balance) can help you stay out of debt. One of the advantages of having fewer credit cards is that they will prevent you from spending what you don’t have. Only use the credit card for emergencies and grow your credit history and score.
Having fewer credit cards that you can manage is better than several maxed-out ones. In addition to this, it will be easier to grow your credit score with one card. Lenders will also see you as a low-risk customer making it possible to get low interest on credit cards and other loan arrangements.
2. Use money apps
If you have a smartphone (many people today do), you can use money apps to keep track of your spending. These apps can help you monitor and control your spending, especially if you spend on impulse. Some banks have also implemented and developed apps to help you manage your bank accounts and money from your phone. Other apps, such as Monzo and MoneyHub, make it possible to see all your bank accounts in one place to help with debt – Monzo upgraded to a mobile bank account. Saving money has never been easier, thanks to these apps. You only need to identify and install one on your smartphone to start tracking your spending.
3. Start an emergency fund
Debt can leave you with no money to care for emergencies, especially if you hadn’t saved for a rainy day. Although many people depend on bank overdrafts and credit cards when faced with emergencies, this only drives them deeper into debt. Whatever your debt status is, it’s advisable to create and build an emergency fund. Save whatever little you have and watch the fund grow. There are also plenty of tools and apps (such as Chip and Plum) that anyone can use to save bits of spare cash from their current accounts with just a click of the button.
4. Look for an extra source of income
Having more than one income stream is, by far, the best way to get out of debt. The extra income will help ease pressure on the primary source, making it easier to channel more money towards debt repayment. The additional income stream can be working overtime, taking a second job, or even working during weekends. Depending on what you do, taking a second job might be the best way to pay your debts. If getting a second job isn’t an option, you could then try starting a side hustle (offer services of what you are good at), which can help you generate more income.
5. Sell off items you no longer need
Do you have items you no longer need? Check the attic or the garage to see if there are items that can be flipped for cash. What may not be helpful to you now could be another person’s treasure. Some things such as old toys, baby clothes, magazines, electronics, chairs, etc., can fetch you good money at a car boot sale. You can also sell the items online on eBay and other online listings. Creating a listing on these eCommerce websites is relatively straightforward. Just remember to take good-quality photos of the things and make vivid descriptions of the same in the listing. You could also opt to sell handmade clothes, vintage clothing, jewelry, second-hand designer clothes, and their accessories on popular websites, e.g., Depop or Vintage. You can be sure to sell the items for as long as they are in good condition.
If you can properly follow all the above described tips, then you will certainly be able to come out of your debt and improve finances.
