We need to kōrero about the D word! The longer you keep your debt, the more expensive it gets, which can be stressful and drag you down. Imagine how good it would feel to be debt-free! Here’s the quickest way out.
We need to kōrero about the D word, debt.
Debt is any time you owe money to others. It can really drag us down. It is stressful. And the longer you keep it, the more expensive it gets. Missing repayments will cost you even more with late fees and interest, and we don't want that.
It will also affect your credit rating and your ability to borrow in the future.
But you can work your way out of it and get debt-free, and just imagine how that would feel. So, here's a few things that you can do right now to get rid of debt quicker. To pay down debt as fast as you can, you'll have to pay off more.
So, you'll want to try and find extra money in your budget and funnel it towards your repayments.This might mean a few sacrifices for a while, but it'll save you money in the long run.
If you have multiple debts then you should make the minimum payments on all of them, but focus any extra money on paying off one debt at a time.
Which debt you pick to pay off first matters. The quickest way out of multiple debts is to pay off the one costing you the most, and that's usually the one with the highest interest rate. This is called a debt avalanche.
Or you might want to build a bit of momentum and start with the debt with the smallest balance, and then take on the big ones. This is called a debt snowball.
If you've got a lot of different debts, it can sometimes feel like it's all too much. This is when debt consolidation might be useful. This means that all your debts are consolidated into a single loan, often with the lower interest rate which can save you heaps in interest and help you repay it all.
But, for debt consolidation to really work, your relationship with debt needs to change. That might mean cancelling your cards so you steer clear of more debt. Let's recap on how to get out of debt quicker.
Find extra money for repayments, focus on one debt at a time, you could start big or you could start small, and if you make it work for you, consider debt consolidation.
Start with these tips and say haere rā to debt.
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