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Debt has become far too normalised in today’s society. Most of us will have some form of debt, if not just a mortgage there’s probably a lump of consumer debt – car finance, loans and credit cards.
So why bother trying to pay it off? You can afford the monthly payments, right?
Well this is where you need to look at your mindset. Consider why you are happy paying that £200-300 a month towards debt – just because you can technically ‘afford’ it, doesn’t mean you should bury your head in the sand and pretend it’s not there.
Just imagine if that amount of money was going into your savings and investments instead, how wildly different could your financial future look if that was the case.
Have I convinced you? Here’s some ideas to kickstart your debt pay off plan.
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This is a pretty urgent one, as the deadline for reclaiming PPI is 29th August 2019. But if you have had a credit card or a loan, then there is a chance you unwittingly took our PPI along with it.
There are lots of adverts for companies who will help you reclaim your PPI – they don’t do this out of the goodness of their hearts, they’ll take a big chunk in commission. Keep every penny and reclaim it yourself. There’s an excellent guide on Money Saving Expert that will take you through it step by step here
A few years ago, I successfully reclaimed several thousand pound for my ex partner for a loan he had taken out. He was then able to put this money straight to his debt – it effectively helped get him there in the first place!
If you are able to successfully claim anything, don’t treat it as real money and get excited and start thinking about what you can buy. Instead pay it straight off the debt it helped create and feel satisfied when the number owed goes down.
Check Your Fixed Expenses
I bang on about this all the time, but go through your budget line by line and check to see if you could be saving any money. You can find lots more information and how to in this post here.
If you manage to make a saving and a DD goes down, increase your debt payment by that amount.
For example, if you got rid of your TV subscription and switched to Freeview, saving £23 a month. Increase your debt payment by £23 – you won’t miss the money, you were already paying it out.
An afternoon spent reviewing your budget is so worthwhile, by the end of the day you could be putting an extra £100 to debt a month – have a play around with the debt repayment calculator and see what sort of effect that would have on your debt pay off date, amazing right?
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There are lots of different apps and websites out there were you can earn a little extra money, instead of allowing those earnings to be swallowed up in your day to day spend, withdraw it and pay it straight to your debt. You’d be surprised how quickly those little amounts add up!
Need some ideas?
There are ‘no effort’ side hustles which you can easily slot in your day if you’re busy and feel like you can’t make time for anything else.
Have kids? No problem, there are a number of side hustles you can fit around family life.
Have blocks of ‘dead’ time in your day? I.e. lunch breaks etc when you would normally scroll social media? Try a few surveys instead.
Got lots of clutter lying around the house you’ve been meaning to get rid of? Why not get started on ebay?
Or do you just need a quick cash hit? I’ve got you covered.
Okay, so this strictly won’t get your debt paid off faster BUT it will stop your debt free date getting further and further away.
Always check if you’re eligible for a 0% balance transfer when your promotional rates are up.
There’s no point paying a £20 minimum payment, if you’re accruing that much in interest! You’ll never pay your debt off. Worried you’ll be rejected? Many websites offer an eligibility checker so you can check if you’re likely to be accepted before applying.
If you are rejected, don’t rush to apply for another one – multiple credit applications and rejections in a short space of time will severely impact your credit worthiness.
It’s just best to wait 6 months until the searches drop off your report. Then you can try again when you’re hopefully in a better situation.
Bye Bye Debt!
Having debt is not something we should become accustomed to just because it’s the ‘norm’.
Your money will serve you so much better being put toward your future, than paying off your past.
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