If you are drowning in debt, here’s my Fast & Bulletproof Debt Plan
1. If you are in debt right now, are you going backwards (getting worse) or maintaining level?
2. If you are maintaining, then work out how much you currently pay now per month, let’s say it’s £500 per month.
3. Resolve to pay the minimum of all debts each month, except one, then work out how much that would be in total, say that’s £450 a month.
4. Work out which one has the highest APR% Pay the difference between the total of all the other minimums and what you are paying now, so in this case £50, off the debt with the highest APR. Do that each month and stick to it.
5. If you can’t NOT use your cards and you are NOT maintaining (it’s getting worse each month), it’s not because you are a bad person, it’s because you are not earning enough each month to cover your outgoings. Your debt payments going up each month is making things worse.
6. Work out realistically what your (frugal but bearable) life monthly outgoings are as a family, and don’t forget to include the occasional stuff like haircuts and birthdays/Xmas and basic clothes like shoes.
7. Work out what the difference is between what you earn and what you need as above.
8. Work out the FASTEST EASIEST route to make up that difference and more. Rent a room out, sell some stuff on eBay or Facebook Marketplace, start a real world part-time business like gardening, cleaning or babysitting, or learn how to make an extra income online. Brainstorm as a family how you can ALL make more money. Don’t let the responsibility fall on just one person, it’s too heavy a load to carry alone - I know that one! Concentrate on all making more money NOT saving more money. This is the way to positively spiral your way out of debt and into wealth.
9. Consider working with a debt management company who can take some heat off – the credit cards and banks do bully you something shocking and you’ll be shocked to know they are actually trained in how to do it. At the very least, tell them you will only communicate with them via letter, change your phone number and don’t give it out or call them from it.
10. If you need help with Point 8 – think about upgrading your Subscription here and I can help you make a part-time (initially) then a full time living online.
This weeks money tip was sponsored by ‘The Money Gym’ book. Along with the companion book ‘21 Best Money Tips’, ‘The Money Gym’ has been helping ordinary people do extraordinary things with money for over 10 years now.