Debt control

Written by    Last updated: September 5, 2007

Over-spending can become a bad habit, just like smoking, drinking or over-eating. Here’s how to get on top of your finances…

debt control

7 steps towards controlling debt

Step 1: Keep a spending diary for a month and then assess the results to see if there are areas where you can cut back.

Step 2: Get a feeling of being in control rather than a feeling of deprivation. This will help you to view saving money in a positive light.

Step 3: Stop buying on impulse. If you really want something, leave it for a day or so and re‐consider if you still want it (many shops are willing to hold it for you for 24 to 48 hours).

Step 4: Cut down on daily expenses. Do you really need that coffee takeaway on the way to work? Replace it with a cheaper (and healthier) alternative.

Step 5: Be creative about sourcing things: second‐hand shops or online shopping can give you huge savings.

Step 6: Allow yourself small treats from time to time, but only after you’ve saved for them.

Step 7: Work towards achieving some major goals: buying your own place, starting a family or the holiday of a lifetime are great incentives for saving.

Some tips on financial management

  • Keep a monthly income and expense account.
  • Mark out due dates for bills for each month on a wall calendar.
  • Sign up for online banking; checking how much money there is in each account will help to make you aware of expenses.
  • Lock up and leave your credit cards at home to avoid the temptation of using them; use a debit card instead.
  • If you owe money on several credit cards, start with paying off the minimum on each card and then tackle paying one card at a time. For you, paying off the debt is more important than collecting savings in an account as the interest you’ll earn in the savings account is likely to be far less than the interest you are paying on your debts. Contact your bank to see if you can get one consolidated loan on lower interest rates.
  • Switch your mobile to pre‐paid. Use the phone at work or utilize cheaper rates on your landline in the evenings. You’ll still have a phone for emergencies and will cut down on your monthly bills.
  • The same goes for broadband and cable. Figure out whether you need both or if you could do without – at least until you’ve paid back what you owe.

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