Debt is a significant obstacle on the path to reaching your short-term financial goals.
If you’re carrying debt across multiple accounts such as credit cards, mortgages or personal loans, you could find yourself stuck in an endless spiral of debt as your payments grow larger and larger due to interest.
However, you can bring yourself out of debt with the right tools and motivation.
Whether you were planning on reducing expenses or focusing on financial planning, now is the best time to refocus your efforts towards paying off your debt.
To help you effectively manage your finances and achieve your short-term financial goals, we’ve put together five helpful tips for managing your debt and uplifting your financial well-being.
Let’s get started!
1) Align Your Spending and Values
To align your spending with your values, you need to aim to spend less than what you earn every month. Living within your means is a vital part of your financial well-being.
To save money and work towards your short-term financial goals, you need to be aware of your overspending habits. If you find yourself unable to pay off credit cards, impulsively buying items out of boredom or breaking your self-imposed financial rules, you’re overspending.
The first step to getting out of this cycle is recognising it. Once this is done, actively work to prevent overspending by building a smart budget and cutting back on living expenses. Through saving methods like these you will be able to positively align your spending habits and live within your means.
2) Work Some Side Hustles
Starting a side hustle is an effective way to boost your income and take control of your finances. Evaluate what skills you possess or any areas of interest and find out if it’s possible to channel them into a potential source of income.
Alternatively, you could also pick up more generic side hustles like selling old clothes online or becoming a delivery driver on your days off.
If you think you don’t have the time to put into a side hustle, you could always try it out as a short-term endeavour as a contribution towards outstanding debt repayments.
3) Improve Your Credit Score
Why does your credit score matter so much? Essentially, a good credit score helps you appear more trustworthy to lenders, by showing that you are able to responsibly manage your finances.
With a good credit score, you have better chances of getting approved for loans along with access to better interest rates. Although you may still get approved for a loan if you have a poor credit score, you’re likely to be charged a higher interest rate.
Fortunately, there are multiple steps you could take to improve your credit score like making timely debt payments, reducing your credit utilisation ratio and much more.
However, while the score is not the only factor that decides everything, having a good credit score does provide you with more financial freedom and helps achieve various short-term personal financial goals.
4) Consider Debt Consolidation
One of the best ways to crush your debt goals and improve your finances is to actively work on reducing your debt. Whether you’re carrying debt from credit cards, student loans or payday loans, these monthly expenses stack up.
As such, it is a good idea to learn about debt consolidation and find out if it’s the right option for you. If it is, you might be able to take out a debt consolidation loan and roll multiple debts into one, ideally at a much lower interest rate. However, as discussed earlier, you will likely need a good credit score to qualify.
Nonetheless, when you minimise or eliminate these debt payments, you’ll have more financial freedom to save, invest and focus on other short term financial goals.
5) Maintain a Budget
Simply taking a stance to save more money doesn’t contribute to making it happen. That’s why creating a budget is a vital part of smart money management and the key to financial success.
Getting started and sticking to your budget is tough. Yet, many believe that it’s even more impossible to achieve your short and long-term goals without a budget.
To meet your short term financial goals, you have to be diligent. If you’re struggling to keep track of where you spent your paycheck by the end of the month, creating and maintaining a budget could come in handy. Moreover, with budgeting apps and online tools, it’s now even easier to track your spending and identify where you need to cut down expenses.
With a clear understanding of where your money is going every month, you can effectively reel in spending and foster better financial habits to meet your short and long-term financial goals.
Choose Salad Money For Fair and Affordable Loans
Now that you’re aware of the different ways to overcome debt, you need to get started on implementing them.
If you feel that debt consolidation through a loan would be a good place to start, then rest assured knowing that Salad Money is here for you.
As one of the leading online lenders in the UK, we completely understand that the traditional loan system isn’t always fair. That’s why we use open-banking-based assessment to evaluate our applicants instead of solely relying on their credit scores.
With our More Than Your Score loans, we hope to provide working employees with the best possible personal loans irrespective of their credit score.
To learn more about our services, click here and apply for a loan now!
