19 Jan 2018

7 Quick Tips For Paying Off Multiple Debts

Tips for paying off debt

Ready to start chipping away at your debt and becoming debt-free faster? Here are simple ways to help you tackle multiple debts and take real steps toward getting out of debt.

1. Set yourself a goal

Get started by making a list of all your high-interest debts and the fees and charges associated with them. Then set up a realistic goal for yourself as it will take time and self-discipline to pay them off. That will also help you stay on track and motivated to reach your goals.

2. Put away the credit cards

Leave your credit cards at home when going out, so you’re not tempted to swipe and spend. If you can’t cut them up altogether, put them away until you have entirely paid off your outstanding balances. Paying for your purchases with cash instead will make you think twice and help you keep tabs on your spending.

3. Trim your expenses

A simple way to free up your cash flow is to spend less. A good strategy to speed up debt repayment and get out of debt fast is reviewing your monthly expenses and look for opportunities to cut your costs. Simple things you can do like cutting down on restaurant takeaway and daily coffees can save you a lot over a year! Examine your spending habits to see if you can find ways to save some money.

4. Make a budget and stick to it

Write down your monthly expenses and allocate cash towards it. This will ensure you are living within your means and will also give you a timeframe on when you can expect to get debt-free. Want some help creating a budget? Get a head start and use our Budget Planner Calculator.

5. Consolidate your debts and save

Keeping up with multiple debt repayments due at different times of the month can become a challenge. Consolidating your smaller debts into one loan leaves you with just one loan and one much easier monthly payment to manage. And because you have just one loan, you’ll only have one set of fees.

6. Use savings to pay off your debt faster

It’s important to remember that the money you save by paying off your debts will be much, much higher than the interest you will earn in a regular bank savings account. An effective strategy includes channeling your extra savings and lump sum payments like tax refunds, pay increases or work bonus into paying off the debt with the highest interest first.

7. Refinance your mortgage

If you own your own home, you may have enough equity to refinance your loan and consolidate all of your debts into your mortgage. Make sure you consider all of your options and seek financial advice before you decide on what will work best for you. Rolling your smaller debts into your home loan allows you to enjoy the same low-interest as your home loan and single monthly repayments to manage.

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