Over the past two decades, it has become increasingly easy to obtain credit. The combination of the booming economy and rising household wealth has created an environment where spending is encouraged, even when the money isn’t there to spend. Using debt to pay for major purchases and living expenses has become the norm. It is no surprise that younger generations feel the brunt of this heavy debt load, as income for those between the ages of 21 – 25 is a mere $791 each week on average.
Carrying debt forward is an expensive choice, making it difficult to get rid of debt altogether. Utilising debt irresponsibly can also mean challenges with lenders when it comes time to purchase a new car or your first home. However, younger generations have the opportunity to break the mould of the debt lifestyle. Here are some easy ways to develop a debt management plan and get rid of debt, for good.
It may seem like a common sense approach to debt management, but implementing self control by not adding to debt each month is the first step. It is impossible to get rid of debt if the balances and interest charges continue to rise. Focus on living on only what you earn each month, and plan ahead for major purchases. Once you have committed to stop using credit cards or taking on additional debt through personal loans, you can start moving toward getting rid of debt strategically.
Not all debts are created equal – some will have higher interest rates than others. To be successful in debt management, you need to be aware of what each credit account’s interest is. Starting to repay higher interest rate cards or loans first is recommended, while consolidation may be a viable option if there are numerous accounts outstanding. These strategies are effective only after you are committed and have stopped adding to your total debt obligations.
Debt management takes equal parts patience and motivation. In order to be successful in whatever strategy you choose, it is important to remember that it takes time to get rid of debt. Set reminders for yourself about the goals you have for the future, and estimate how much you could save by being debt free. Staying motivated is crucial to your success in debt management, no matter the strategy you decide to implement.
It is possible to break the cycle of living in debt and create strategies to help you get rid of debt altogether. Remember, in order to be successful in breaking the mould, you must be committed to stop adding to your debt, develop a plan that works for you, and stay motivated! If you are serious about getting out of debt, work with trusted professionals. Just Budget has a proven track record of successful budgeting planning and handling creditors for clients. Call us on 1300 795 775 or Apply for budget help now!