5 TIPS YOUNG COUPLES CAN APPLY TO PAY OFF DEBTS EASILY

5 TIPS YOUNG COUPLES CAN APPLY TO PAY OFF DEBTS EASILY

Being in debt can be such an inconvenience. My colleague at work is so deep in debt that he does some strange things. Like missing work a week into the new month to avoid being found 'on seat'  during working hours. He follows this up by being unreachable via phone. All in a bid to avoid his creditors.

He is not alone in this behavior. There are many people like this. This doesn't have to be your story

Here are 5 tips you can apply to be debt-free in six months or less.

DEBT FREE TIP 1: Make a budget

Make a list of all your sources of spending and all your sources of income. All means all. 

1. Airtime recharge, 
2. Sunday service offering, 
3. a quick trip to the market to buy some salt, 
4. a quick snack here and there. 
5. a haircut etc.

All expenses should be accounted for.

You can better organise your expsnes by spliting it into discretionary and non-discretionary expenses. 

Non-discretionary expenses 

are expenses that you know you MUST make every month. Most expenses here are necessities. 

• energy bills,
• water bills,
• gas bills,
• rent(if paid monthly), etc 

fall into this category.

Discretionary expenses 

are expenses made on items that you buy at your discretion.

• Subscriptions (cable, associations, clubs, gym),
• airtime/data,
• eating out.

Write as many expenses as you can remember. Don't hesitate to update with new expense data as the month progresses. Of course, don't forget to include sources of income. 

For most people, this area of the budget seems leaner than the expenses side. But it still needs to be done meticulously. All income - no matter how small should be entered.

DEBT FREE TIP 2: Reduce your expenses

A detailed budget will do the following for you.

1. Show where you are spending your money.
2. Help you compare your income and your expenses.
3. Show you expenses that you can reduce, delay or do without.

With all this information you can make a better assessment of what your real financial needs are. You could also move some non-discretionary expenses to discretionary expenses.

Cut out any expenses that you can live without. If you can't cut it out, at least reduce it to the smallest. Eg. reducing your cable subscription from the N7,900 package to N2,755 package.

DEBT FREE TIP 3: Increase your sources of income

Reducing your expenses must be complemented by increasing your sources of income. Day-to-day expenses will put a lot of pressure on one source of income. Debts will wipe it out. There are a lot of ways you can earn from many incomes sources through passive activity. Check out some of them in the post below https://www.facebook.com/101186211608098/posts/271121641281220/. Any debt payment plan you make without including another source of income will drag

DEBT FREE TIP 4: Sell Excess Possession

Every home has its share of possessions - some unused. Look closely to identify items that you have no use for - at the moment. Items like toys, clothes, books, furniture, electronics, etc. These items may not be useless but you don't have any use for them. And you haven't needed them for some time. Holding onto a tonne of possessions won't do you any good but it could do someone else a world of good.

So what do you do? Sell it all. A garage sale might have worked well in the 80s or early 90s. If you have a Facebook account you can sell a tonne of stuff through Facebook Marketplace. Of course, there is always Amazon, eBay, Gumtree, and SellOff.ng, Jiji.ng, etc.

I assure you that getting rid of those extra belongings will

1. Free up space in your house 
2. Reduce any guilt you feel when you see those underutilized items. 
3. Make you happy for adding value to another person's life

The biggest bonus is that you make some money. Money which you can use in paying off your debts.

DEBT FREE TIP 4: Use the debt snowball technique 

(as suggested by Dave Ramsey in The Total Money Makeover)

A snowball rolling down a hill starts small and grows bigger as it moves. By applying this same formula you can pay off your debts. A little at a time.

Let me explain further:

1. List all payments in the smallest to largest order.
2. Commit to paying off the smallest debts first
3. Commit to making small deposits towards the rest of the debts.
4. When the smallest debt has been paid off, roll over its payment to the next debt payment.

Use visual cues like coloring sheets or calendar markings to motivate yourself.
These cues will help you track your progress and mark off debts paid.

Debt payment is not easy. It requires a lot of self-discipline, sharp focus, and long-term commitment. But in the end, it's well worth it. You lose that feeling that the income you have is not yours 

So in summary, the tips to paying off debt are budgeting, cutting your expenses, increasing your income, and working the debt snowball. 

It doesn't get any easier than that. Give it a try. 

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