Money management has become crucial in recent months, likely in ways that many people never would have predicted. The amount of changes the nation has collectively had to get used to over the last few weeks alone is mind-boggling.
Like many commitments, debt can be handled more easily once they are organised and prioritised.
Hannah went on to highlight how this should be done in practice: “Debt is debt – no matter where it’s from.
“However some debt is better paid off first. Credit cards for example often have high interest rates attached to them, so paying those off first is usually a good idea.
If, however, your card(s) is interest free, then it’s worth looking at other avenues and seeing which debt has the highest interest rate to ensure you’re not paying more in interest than your original debt.
As difficult as it may be to do, she also explained that how we think about our finances needs to be reversed if we’re to have a chance of managing our assets effectively: “Keep a tally of your finances budgeting is hard – we know that. And as much as many of us would prefer not to know how much we spend every month, we all need to know that magic number so we can spend and save smarter. Write outgoings down and keep them somewhere prominent – such as on your fridge or a memo board. This will help keep the figure in your mind and make sure saving where you can is at the front of your mind.
“We’re often told to save what we have left over, but reversing this thinking can ensure you pay off your debt sooner rather than later. Work out your necessities such as your bills, set aside an amount per month to pay off, then work out how much is left over for you to spend on life’s little luxuries. You might have to sacrifice a few things, but you’ll be debt-free much sooner!”
Published at Sat, 20 Jun 2020 04:00:00 +0000