Nowadays, households in Great Britain owe a sum of around £15,000.
If you find yourself struggling with debt, it can feel like a never-ending slog to pay back each and every penny.
But, if you’re interested in living debt-free and are ready to put in some hard work and diligent dedication, then luckily it’s possible to completely change your life.
Aside from paying off your high-interest debt first, here are a few more methods for helping you live a debt-free life faster:
1. Create an Accurate Budget
In the UK, 10% of people admit that they are terrible with money. But, it’s impossible to pay back debt if you don’t know exactly how much your lifestyle costs you.
Work out everything from how much you spend on food every week, how much your rent and bills cost, and how much you need for expenses such as travel or childcare.
Next, work out how much you spend on luxury expenses, such as clothing, going to the cinema, or eating out.
There are many budget tracking methods including apps, such as Monzo, or simply writing everything down with pen and paper.
Now, budget how much you can spend on monthly debt payments. Don’t overestimate this figure, it needs to be precise to give yourself peace of mind.
2. Take Things Slowly
Pummelling all of your earnings into paying off your debt is simply not sustainable. You’re likely to give up completely.
Instead, consider your debt payments as a slow but sustainable practice. Set yourself realistic goals, such as a year or two to pay off your debts.
Although it’s a good idea to cut down on luxuries, it’s still worth planning when and how you’ll treat yourself. Don’t let your entire working life be spent trying to pay down debt.
3. Learn to Love the Free Things in Life
There is no point in paying off your debt only to start spending again. You need to develop interests that are free.
Luckily, there are many free activities nowadays. Join a free running club with other locals, sign up to free trial classes, visit museums, and go to lectures.
You’ll be amazed by how much there is to do for free when you start looking. Regularly attending free events in your hometown is a great way to meet other people with similar interests and avoid those with expensive tastes!
4. Find a Mentor
Are you struggling to keep up the motivation to pay off your debts? Find someone who has travelled along this path before you to help keep you motivated.
This could be someone you know in your personal life or it could simply be a celebrity. There are hundreds of podcasts dedicated to finances and living debt-free.
You’ll find untapped expertise and knowledge that will help you improve your own circumstances.
For example, read this post by Giles Coghlan, chief currency analyst at HYCM, explaining the secret to trading on the financial markets!
5. What’s Your Reason Why?
Crippling debt has regularly been linked to depression. This is a good reason why you should sort out your finances.
But, if you aren’t struggling with a mental health issue, then perhaps this isn’t a good enough reason for you. Instead, find your own reason why you want to live debt-free.
Develop your own mantra that you repeat to yourself whenever you want to make an impulsive purchase.
6. Leave the Credit Cards Behind
Figure out why you are in debt. If you are simply an overindulger and spender, then there are many ways for you to trick yourself into avoiding spending money.
For example, taking only the exact amount of cash you need with you whenever you go out can stop you from spending too much on nights out.
However, if you are a struggling, single-parent, then speak to your local authorities and even your bank who may help you reduce your monthly payments.
Analyse your circumstances and the reasons for being in debt to help you avoid this situation in the future and repeating the same behaviour.
7. Generate More Income
This is an aggressive method for paying off debt that simply isn’t available to everyone. But, it can certainly help you get out of debt quicker.
By picking up a second job for a few months, you’ll drastically increase how much you earn. But, don’t ever put your mental health at risk by overworking yourself.
Only take a second job if you feel that you feasibly have the time and energy to do this.
Alternatively, consider other ways of making money such as selling unwanted clothes, furnishings, jewellery and kitchenware online. If you have a spare room, then consider renting out your room.
8. Build a Savings Account for Emergencies
As well as focusing on paying off debt, a good idea is to build an emergency fund. By doing this, you’ll have an out when something doesn’t go to plan.
By building up this fund of a few thousand pounds, you will have the peace of mind that you don’t have to stay in a job you hate, or that you can afford rent somewhere else if your tenancy is pulled from under your feet.
While paying off debt and building your savings account, be kind to yourself. Not everything is going to go right every month.
Can You Imagine Living Debt Free?
Picture how great you will feel when you are debt-free and have some savings in the bank. Living debt-free requires dedication and time.
When you’ve paid off your debts, you need to make sure that you don’t slip into your old ways and spend more than you earn. If you’re struggling to pay off your debts, then consider speaking to a financial advisor or make an appointment at your bank.
Are you interested in learning more about finance? Check out the dedicated section of our blog for more information.