I often say this to myself, “I want to clear my debt” but I noticed that I find myself borrowing again just to be able to pay my existing loans. I’ve been thinking about how I can clear my debt as soon as possible.
Are you experiencing the same thing? Do you find yourself worrying too much about money, credit card debts, mortgage loans, taxes, or car loan? It is not the end of the world my friend, because I’ve been in the same situation and I was able to survive by practicing the stack method.
How Did I Clear My Debt?
- Stop borrowing – Cut your credit cards and start paying in cash. Stretch your budget and stop acquiring things that aren’t too important. Creating new debt, applying quick cash loans or using your credit cards will just make things worse.
- Have a list of your debts – Grab a pen, notebook, sit down and write down your debts according to interest rates. Loans with high interest rates should come first down to the lowest. Prioritise loans with high interest rates.
- Modify or Improve your Spending Plan – Spend your money wisely. This is not the time to splurge or spend on things that you don’t really need. I was wondering how I can clear my debt and this particular step helped me ease my burden. Allocate your money. Indicate percentage of how much of your money goes to this and that. For example, your cash on hand is $10,000.00, how many percent will you allocate for education, groceries, etc. Do not forget your payables. If there are any receivables, then you should also put an allocation or use it to pay your existing loans. You need to specify the amount and keep yourself on track.
- Track your progress – Are you achieving the results you wanted? Were you able to pay your loan with the highest interest rate? If yes, then cross it out and proceed to the next. By creating a checklist, you will be able to monitor your progress.
I was able to clear my debt by following these simple steps. While in the process, you may experience difficulties. If you want to clear your debts, then you should have determination. Learn how to manage your finances well, pay in cash, follow your strategic spending plan and recite this mantra “I can clear my debt”. In the end, it’s you who will benefit and it’s you who will have financial peace of mind.