Three Steps to Getting Out of Personal Debt – For Good

There’s no shame in admitting you have an issue with personal debt. Credit cards and personal loans are so common today. Mainly because it’s an expensive world we live in – and wages have had no significant increase in many years – while costs have kept increasing.

But personal debt has an unpleasant side effect that can seep into the rest of your life. The stress of constant juggling debt, paying minimum payments, and “robbing Peter to pay Paul” can have a significant impact on your life happiness and general stress levels.

So many of us manage to rack up debt – without a solid plan to pay it back.

I can honestly say from personal experience, the feeling of getting rid of personal debt for good is entirely liberating.

So, if you are tired of feeling the pressure and stress of debt, here are three tips to work toward getting yourself free.

1. Consolidate your debt.

If you have more than one credit card or personal loan, roll them into one. That way you reduce the pressure of paying different payments over a month, and just find the money to pay one. You may also be able to access a cheaper rate doing this. Some credit card companies offer 12-month interest free periods to roll over balances. Your bank may give you a personal loan to cover it. Do the leg work and find out what’s the better deal for you. Don’t just accept the first solution you find. This will help you in the long run.

2. Stop racking it up.

I mean it. STOP! This means changing your lifestyle, and while its hard at first, you will find this the most valuable exercise of all. This means looking at why you are spending on credit in the first place, and trying to avoid that moving forward. Many people are eating out a lot – this can definitely add up the credit bills. Or putting holidays that you can’t really afford on credit. These habits that give you pleasure in the short term are the things that are holding you back in the longer term. While a week holiday in Fiji feels great at the time, paying it off with 17% interest on a credit card does not feel good at all. All the things that you feel are giving you pleasure today, are actually keeping you in a state of stress over the long term. Seeing this as a truth and planning differently will help you immensely.

3. Start a side hustle.

Debt can take a long time to get paid off, and the more you put toward it, the faster it goes. Once you have your debt consolidated, figure out how many months or years it would take to pay off at minimum payment. Then have some fun with tipping extra amounts into these payments to see how much quicker you can pay it off. The Australian Government MoneySmart website has some calculators that allow you to easily do these numbers.

If you can see that an extra $50 or $100 per payment shaves months off how long you have to pay for it, then hustle. Drive an Uber. Sell some unwanted stuff on gumtree or eBay. Babysit, mow lawns, do odd jobs. Whatever it takes to get a bit more in the door.

While all of these things take focus and some extra work for you, believe me when I tell you, the day you can say you are free from personal debt, is the day you have won back your freedom. That, and peace of mind, is worth it.

Until next time,

Vanessa Stoykov is a financial educator and storyteller who has spent the last 24 years working in the financial services industry with some of the best investors in the country. Her website, has tips and insights on how to find the right financial advice, and regular blogs from Vanessa on reinventing your future through unlearning your habits with money.

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