The new year is almost around the corner and so many have started planning their finances for the next year. No one wants to bring debt into the new year. However, debts don’t just disappear unless something is done about them.
The approach you use in tackling your debt will determine how successful you are in becoming debt-free. If you are looking forward to a new year free from all manner of debt, then the tips listed here are for you. Let’s quickly dive in.
#1. Have a Budget and Stick to it
One of the easiest ways to enter the year with debt is to believe you can do well in managing your finances without a budget. A budget gives you a sense of direction and helps you organize your finances. It gives you a blueprint of what your estimated income and expenditure should look like.
However, beyond drawing up a budget, you must commit to keeping to your budget. Now, this is the challenging part. It takes a lot of planning and discipline to stick to a budget. Sometimes, you may need to resist the temptation of wanting to spend beyond what you have estimated. Your finances will leap over the moon if you can draft a budget and keep to it.
#2. Cut down on Expenditure
The new year is quite close to the Christmas holiday season and one characteristic of most holidays is that expenses increase. Making a deliberate effort to keep your expenses down as much as possible will help to ensure that you don’t spend beyond your means.
It also takes a lot of discipline to resist the temptation to overspend within this period. You will get invited to different events at this period and may want to buy gifts for your loved ones. While it is vital to have a good time with family and friends, also ensure that you put a cap on your spending so that you don’t end up accumulating debt.
#3. Consolidate your Debt
Debt consolidation has proven to be a feasible strategy in paying off debts, especially ones with high interest. Clearing your debt log will ensure you don’t enter the new year with debt. Debt consolidation will not only help you pay off your debt faster, but you also get to pay less in interest.
#4. Increase your Income
While it is important to reduce your expenses, you also need to find ways to increase your income. You can do this by finding other ways of making money. So many side-hustle that you can engage in while maintaining your regular job or business abounds. Side hustles like freelance writing, tutoring, and social media account manager can bring in a considerable amount of extra cash.
Final Thoughts
It is possible to enter the new year without debts if you can apply the right strategy. The tips given here are not the only thing you can do to ensure you enter the new year debt-free but can set you on the right path.
