This article was originally on GET.com at: 5 Ways To Kill Off Debt Fast Before It Kills You
Ah, the world of debts, aka your unofficial initiation into the rigours of adulthood. Almost every Singaporean walks around with some form of debt on their back. Whether it was because they applied for a home loan, a car loan or a student loan, most of us have loans that need to be repaid.
Then of course, we have the scarier debts, aka credit card debts, which apparently affect more people than we think. It's easy to immediately go into panic mode when we think about debt, which is why GET.com has come up with these 5 ways to kill off your debts fast, because we don't want debt to kill you.
5 Ways To Kill Off Debt Fast Before It Kills You
1. Stop Procrastinating
First things first, stop sitting on your debts and sweeping them under the carpet. I know, it is difficult to deal with debts because of the state of mind that doing so puts you into, but the longer you procrastinate, the worse the consequences will be.
Start small and take simple steps. A good place to start is by accepting the reality that you do actually have debts and they do need to be repaid. Then start taking action. If you can set up a GIRO transaction between your bank account and the payment account, do it.
While you're attacking the problem and taking action to lessen your debt load, you should also stop putting off saving. If you need some help with starting out, here are 5 easy ways to get yourself into money saving mode.
2. Live Simply And Minimally
Of course, we've probably heard this so many times, and we don't really like the idea, but it does make a lot of sense. If you're earning a limited amount every month with no other additional income, you have to be diligent about what you spend your money on.
Gone are the days where you can stroll into clothing store and walk out with a the latest fashions on a whim. Personally, now that I am paying off my student loans, I really make it effort to spend less on everyday things like food and shopping. Friends asking you to eat out? Let's go for a cheap meal. Tempted to take a cab? Go for public transport. Or maybe check out these 4 cheap ways to get around Singapore.
3. Organise Your Debts
Yes, write down all of the debts that you've gotten yourself into, look them straight in the eye, and then sort them out.
Different people do this differently but it's generally a good idea to sort your debts by the amount of interest you pay on them, starting with the highest interest debts. That way it becomes obvious which debts you would quickly want to clear first.
You could also sort your debts according to what you can afford to pay off first. Either way, by organising your debt, you'll be able to see it more clearly and tackle it accordingly.
4. Conquer The Small Ones
A debt is still a debt as long as you owe the money to someone or to some entity (aka the bank). Once you've organised your debts and you can clearly see which ones must be paid soon, try to clear them with a lump sum. How exactly do you do that? That's where your savings come in.
These ‘small' debts include the money you borrowed from your friends, although we don't recommend borrowing money from friends at all. Here are 4 reasons why you shouldn't borrow money from a friend, just in case you need some convincing.
Even though they're not as significant as your bigger debts, clearing off the little ones can help your mind declutter. Plus, it's still one less debt that you don't have to worry about anymore.
5. Use A New 0% Balance Transfer Credit Card
I know it seems complicated. Pay off a credit card debt with another credit card? If you don't know what balance transfer credit cards are, they are basically credit card accounts that offer 0% interest on debt you transfer from other cards (or in some cases even from personal loans) for a specific period of time. As long as you pay off the debt before the introductory interest period expires, you can save a lot of money that you would have spent on interest charges.
If you think this could help you, then here's how you can use a balance transfer card to your advantage.
Most importantly, you need to be mentally okay. You will be surprised at how your state of mind can affect your finances in so many ways. Remember it's okay to be a tight wad for a while as long as your money is going into the right places (assuming you are using it to pay off your debts).
What do you think? Share your comments with us below!
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