5 Ways To Take Care Of Your Debt Like A Total Pro

couple-working-on-their-debt

As far as things that we hate go, debt is pretty high up on that list. And it’s no wonder, since it can be super hard, once you find yourself buried in a mountain of debt (thank you, college), to dig your way out. But despite what it may feel like, debt – even a lot of it – doesn’t necessarily mean it’s the end of the world. There are ways to get out of the financially sticky situation and take better care of your money. Here are some great ways to bring yourself out of the dark hole that is debt, and how to get yourself back to a healthy financial state.

Give yourself a goal, and a deadline.

Make a big goal for yourself, like paying off all of your debt, if you’ve only got a modest amount, or paying off a certain percentage of your debt, if paying off the whole sum isn’t really feasible or reasonable right now. But don’t stop there. Goals are great, but only when you’ve got a timeline to follow. So the next step should be to set up a deadline for when you’d like to meet your goal.  If you tell yourself to do something by a certain time, you’ll likelier have a simpler time meeting that goal in a timely manner. Then, while working up to your big goal, make smaller goals for yourself to accomplish on a monthly basis. For example, instead of saying to yourself “pay off $7,000 by the end of the year,” tell yourself to put $400 towards debt by end of month. By offering yourself multiple chances to meet small successes, you’ll find yourself staying on track more effectively.

Be realistic.

One of the ways that people sabotage their financial goals is by setting themselves up for failure from the start, and setting completely unrealistic goals for themselves with the impression that they will be successful. Setting goals that are near impossible to achieve will only lead you to be disappointed in yourself and will have you struggling to keep up with paying it off. Maybe you’ve crunched the numbers and the only way to pay off your debt by the date you were hoping to be done is by putting $700 towards your debt every month. If that’s not an amount you can reasonably put towards loans, though, don’t be afraid to adjust your deadline a bit. At the end of the day, the key is to set goals and deadlines that are ambitious, but not so much so that you can’t reach them. Instead, set a goal based on what you can reasonably put aside for loans each month, and just tell yourself that the months where you are able to swing more (maybe you picked up a side gig that paid you a little extra cash than your usual job), you’ll put more towards your loans.

Surround yourself with people like you.

Now, we’re not saying people in debt should only be friends with other people in tough financial predicaments. But what we are saying is that surrounding yourself with people who might understand what you’re going through, or who are managing their budgets similarly to you, it could be a huge help. Think about it: when you surround yourself with people who exercise frequently, that helps motivate you to workout more often, too. This isn’t too different. If the people around you are also dealing with loans and have set goals for themselves, you might benefit from learning what they’re doing to deal with their debt, or even helping one another to stay on track. It also never hurts to have people who are always down to plan their social activities around a tighter budget, because let’s be honest, when it comes to controlling your spending, a temptingly-pricey social life can be the easiest way to crash and burn.

Track your spending.

We get it – sometimes you get home after a long day and don’t have the energy to make yourself dinner, so you cave and order in, instead. And while one night of eating out (or, in this case, in) won’t necessarily destroy your finances, it’s the compounding of small, unaccounted-for expenses that can set you back without you realizing it.  To help you stay in control of your money and to make you consistently conscious of where your cash is going, take the time to log and track your expenses and spending on a regular basis. Keep a spreadsheet where everything is broken out into recurring payments, one-time payments, and small miscellaneous bits of spending. Have trouble staying on top of that on a regular basis? Log into your online banking account and look through your spending history to track it all retroactively. The key is to familiarize yourself with where your money is going every week and every month, and to use that info to better manage your spending. That way, not only can you avoid putting yourself in a situation where you’re forced to add even more debt onto your plate, but you’ll help make sure that you can put as much as possible to paying off the loans and debt every month without worrying about falling short.

Understand your credit cards.

Most people these days have credit cards, but do you actually understand how interest works on these things? No matter what your debt consists of, whether it be student loans, mortgage, or credit cards, make sure you read the fine print on all of your statements every time you get them so that you know exactly what you’re paying for, what’s being taken out, etc. Not only is this a good habit to have because it keeps you aware of what you’re spending and where you might be able to make changes, but it helps you plan out how to go about paying off your debt, too. For example, if you notice that the interest on a store credit card is seriously hiking up your payments, make it a priority to pay that card off first. By paying off the debt that comes with the highest amount of interest first, you manage to cut out some of the bigger drains on your finances right of the bat so that you can then turn your attention to your other payments.

 

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