New Year’s debt resolutions
January may finally be over, but if you’re still avoiding that credit card statement or you’ve opened it, and don’t know how you’ll be able to pay it off - here are our top tips to help you achieve your New Year’s debt resolutions.
Track spending
Perhaps the most obvious, but often overlooked. Tracking your spending lay your habits bare and show you where you can cut back.
Whether you prefer to write down your transactions in a notebook, use a spreadsheet, or download an app, taking a couple of minutes every day to make a note of what you’ve spent can help.
To make life easier, limit card usage for emergencies and bills, and instead take out a set amount of cash at the beginning of every month, or week, and just count what you’ve got left at the end.
Create a budget
Once you’ve tracked your spending and have a rough idea of your essential outlay, e.g. bills and groceries, and your non-essential spending, e.g. that new top, meals out and Uber rides, you’ll be able to create a budget.
Experts suggest the 50/30/20 budget rule is the best to follow, with 50% of your spending going towards your needs, 30% towards your wants and 20% towards savings. However, if you have debts, use the 20% to clear that first.
Money at the end of the month can then be put towards your savings.
Switch credit cards
We all know that shopping around gets us the best deals when it comes to things like car insurance and utility bills, so why don’t we do the same for our credit cards?
In order to make sure you’re getting the best in terms of interest rates and other specifics, set aside some time to sit down and properly do some research. Exploring your credit card options is a guaranteed way to improve your borrowing and spending habits.
However, if you’re a long-time credit card user and you’re trying to improve your credit card debt, you can avoid paying astronomical interest on your current credit card by transferring the debt to a new one with zero interest.
Just make sure you pay off the debt before the end of the 0% period – but if you’ve tracked your spending and created a budget this shouldn’t be too hard!
Unsubscribe from emails
As a nation of online shoppers, you can cut your spending by simply unsubscribing from email marketing. How often have you bought something because of a flash-sale email or ‘exclusive’ discount code?
This simple little hack could you save you hundreds over the year, as well as free up your inbox.
Cancel unused subscriptions
Look at your bank statement and highlight any direct debit payments you have and ask yourself if they’re necessary. You might have been one of the thousands of people who joined a gym in January, but with so many incredible free resources online, you can work out in the comfort of your own home.
Similarly, instead of subscriptions to services such as Audible and Headspace, listen to free podcasts or watch YouTube videos.
Becoming debt-free doesn’t mean changing your lifestyle - but making small daily changes. You’ll be amazed how much you can save over a year by implementing these simple habits.
