Being in debt makes life significantly more difficult. Learning how to manage your debts has never been easier, but implementing debt management strategies remains a challenge. The good news is that with only a little bit of planning and a strong strategy, you could be tackling your debts and improving your quality of life. There are lots of ways to save money or use the cash that you do have to reduce your living expenses, and working out which options are the most achievable is simply a matter of knowing where and how to use your money. If you want to get closer to being debt-free in 2021, here are some tips that you may not have considered.
Saving Money Through Frugal living
The more money that you can put into your debts, the quicker they will vanish. That means being very careful about how you spend your money and looking for ways to cut your living costs. There are many ways to stop spending, so consider:
- Couponing: Don’t use every coupon that you come across (do you really need that product?), but use those that will take a dent out of your weekly spending. Get into the habit of saving those coupons for products that you buy often, and you’ll have more money left over at the end of the month.
- Get Rid of Cable: If you’re still spending around $100 a month on your cable, then you’re pouring money away. You can now stream most forms of entertainment for a fraction of the cost. Use that $100 every month to tackle your debts, and you could be debt-free much earlier than you expected.
- Cook More: If you’re still going out to restaurants a few times a week, then it’s time to stop. Learn some basic recipes, and your monthly spending will drop significantly. You’ll also find that you may even be eating more healthily. The same goes for those that want their Starbucks every morning. Make your own coffee and watch your savings grow.
To tackle debt, you sometimes need more than simply cutting your living costs. The best way to make money management easier is to make more money, so consider these options if you want to have more financial options throughout 2021:
- The side hustle: More people than ever are turning their hobbies into a revenue stream. Thanks to online selling, anyone can launch a new business and start selling with very little in the way of technical knowledge. If you’re interested in eCommerce, look at sites like Shopify or BigCommerce, set yourself up, and start earning some extra cash.
- Enter contests: There are more people entering competitions than ever, and those people are sometimes winning big. The best option for contests is to only enter those with high-value prizes. Look at monthly competitions with a real chance to win free Bitcoin or Ethereum, and you could be investing your free crypto or using it to eradicate your debts.
- Sell clutter: We all tend to accumulate clutter, and a more decisive approach to all of that ‘stuff’ is a great way to make a little extra money. Clothes, books, children’s toys, car parts…there’s no end to the products that people want to buy, and there are more ways to sell than ever. From Facebook marketplace to Craigslist and eBay, post your unwanted clutter, and you could make some serious cash.
Making a Budget
The best way to start tackling debt is to have a much better idea of those debts. Make a list of every debt that you have, and then work out your monthly income. There are plenty of free cash management apps available, so try a few out and start living with a more debt-focused approach. The more you can clearly define a budget, the easier it will be to live according to your means so that your debts won’t continue to spiral. Talk to those companies that you owe money to and look for ways to agree on a repayment plan. Most institutions will offer you incentives to pay off what you owe, even if the repayments themselves are very small. By tackling those debts sensibly, your credit score will improve, and that means a lot more financial options to consider in the future.
Living with debt can be more than just frustrating. It can also lead to ongoing mental health issues that will only make it harder to drag yourself out of that debt. Take the time to formulate a debt management plan, and you could get to the end of 2021 in a much better financial position.