Many of us will have an idea of what sort of new year resolutions we are looking to set in 2018. Some will include losing the holiday weight gained over Christmas due to too many mince pies. Some might include saving more money, travelling, giving up a vice or simply trying to be more positive. A lot of people will have at least one New Year’s resolution directed at money, and more often than not, getting out of debt and improving their financial situation. But could you be doing things right now to better prepare you for a better financial situation in 2018? I wanted to share with you some of the things you can think about now.
Get a total for the debts you have outstanding
One of the first things to do would be to get a total or the debts you have outstanding. Get the most recent statements for any credit cards, loans, overdrafts or finance agreements and tally up the totals, and also how much you pay back as a minimum each month. This gives you your total to clear and your target. It can help you to stay motivated as you start to physically see the total reduce.
Focus on paying back the one that is costing you the most
We all know that different debts can often have different interest rates attached. Some of the debts payable may have been taken where you had an introductory offer that has now exceeded, or perhaps had a better credit rating when you first applied meaning a lower interest rate would apply. But then there may be debts obtained when you have had a lower rating, meaning more interest is charged. Therefore, focusing on paying back the ones that are costing the most means that overall you will pay less.
Consolidate the debts into one payment
A great tip for reducing debt and getting rid of it for good is to consolidate all of them into one consolidation loan offering one payment. That also means one lot of interest is to be charged, so that you can have a plan to clear your debts for good. Of course, this can be subject to your credit rating but you can get hold of homeowner loans with a bad credit rating if you do some research into potential lenders. A good place to start would be to look at your current credit rating to see where you stand on the scale of good and bad.
Could you be making any other savings?
Finally, could you be making any savings elsewhere, generating more income that could be put towards your debts? You may be able to reduce your phone contract by changing your contract amount, you might be able to reduce you TV packages, decrease your energy bill or even switch provider for other insurances and providers to get better deals. Making any savings can then be put towards decreasing your debt; after all, it was already money you were used to paying out.
I hope these tips help you to prepare for a 2018 of getting out of debt.