1. Learn Your Habits and Don’t be Tempted
Knowledge of yourself is important. Understand the difference between bad debt like luxury automobiles and good debt like home mortgage. When planning for repayment of large debt numbers, examine your own spending patterns. A little bit of self-reflection can help you spot your own weaknesses. Identify non-essential spending trends and limit them so that these extras become real treats. Every dollar saved will empower you to tackle large debt.
2. Fight High-Interest
There are three common schools of thought when it comes to attacking debt. Some would argue to pay down the high-interest large debts first. Others propose attacking and paying off a couple of small debts first to gain motivation. Still a third school of thought argues toward debt consolidation as the solution. Pick a plan that works for you and if you find yourself struggling to make real gains, adopt a different strategy and move forward.
3. Hunt Down Values and Bargains
A new wardrobe from a luxury boutique can easily cost thousands while a trip to a department store can achieve the same results with a bit of digging. There are many types of value seeking strategies out there ranging from coupon clipping, to bulk buying, to only buying things that are on sale. Try out each strategy to figure out which one works for your plans.
4. Create a Weekly Budget
Weekly budgets are a proven way to keep your weekly and monthly spending down. Understanding how much you spend on required weekly costs such as gasoline and groceries will help you decide how much leisure spending you have every week. While budgets may seem boring, carefully planning one and staying accountable to your goals will put you on the path towards a debt-free life.