How to become debt free: 7 tips that actually work

Let's talk about something that affects a lot of us: debt. You know, that feeling when you owe money here and there and it seems like there's always a bill waiting for you in the letterbox or pinging your email? 

Guess what? You're not alone! Whether it's credit cards, overdrafts, payday loans  or even buy now pay later, debt is easy to wander into, but harder to wander out of. And there's a good chance the person you last chatted to  has some kind of debt story to share. It’s important to remember that people from all walks of life have faced their debt challenges head-on and come out the other side, and so can you.

So if you’re feeling a bit stressed or overwhelmed by your debt, here are 7 tips to help you accelerate your journey to  becoming debt free. 

Face the music: Know your debt 📉

Alright, first things first. Grab a pen and paper (or your phone's notes app) and jot down all those debts. List them out – from the smallest to the largest. It might seem scary and you might not like what you see, but clarity and being honest with yourself is the first step to becoming debt free.

Forget Budgeting 💼

Budgeting can feel like a straight jacket from having fun. The sort of thing that holds you back from enjoying life. That’s why most people prefer to ditch budgeting and embrace a Spending Plan. It’s more like telling your money where to go instead of wondering where it went! Creating a spending plan that is based on balancing the money coming in with the money going out (including on funfund stuff) will actually set you free. Figure out your essentials (like bills and groceries) and where you can cut back a bit (do you really need that fifth streaming service?)

Choose Your Battle Plan ⚔️

You've got options here! For some people the "Debt Snowball" method works – tackling small debts first for those quick wins. Others swear by the "Debt Avalanche" – hitting the highest interest rates to save more money in the long run.

Debt consolidation is another debt repayment method. This is when you use a loan to pay off higher cost debt or multiple debts at a lower rate. Debt consolidation may not be the best solution for everyone, it’s important to look at the interest rates as well as the total repayment amounts.

Check to see if Salary Finance could help you with a salary linked loan by visiting here.

The most important takeaway here is to pick your strategy and stick with it!

Be a Negotiation Ninja 🥋

Time to put on your negotiation hat! Call up your creditors; ask about lower interest rates or payment plans. Sometimes they're more flexible than you think, especially if you're upfront about your situation and willing to find a solution. 

One thing to be aware of is, a payment plan will usually affect your credit score. This is because you’ll be paying less than the originally agreed amount which will be shown on your credit report.

It’s important to get free and impartial advice before going ahead with any debt solution. You can also find out more about what this option might mean for your credit score here

Emergency Fund to the Rescue 🆘

Life happens, right? And it loves throwing unexpected curveballs. Having an emergency fund – even a small one – can save you from diving back into debt when those surprises pop up. It's like your financial safety net.

If an emergency fund is not possible for you right now - have you explored what financial support you may have through your employer? Check to see if Salary Finance could help you access cash in an emergency with their advance earned pay option here.

Seek Wise Counsel 🤓

Don't go it alone! There are amazing people out there – financial advisors, debt counsellors, or even friends and family – who can offer guidance. Sometimes, a fresh perspective can make all the difference. Don’t forget there are also free services such as, StepChange a debt charity offering free and impartial debt advice, Citizens Advice offering guidance on debt management and negotiating with creditors and the National Debtline who provide free and confidential advice on managing debt over the phone.

Celebrate Small Wins! 🎉

Every step counts! Did you pay off that store card? Woohoo! Treat yourself (within reason, of course). Celebrate those victories, no matter how small – it keeps that motivation engine revved up. Remember that when it comes to your money you want to focus on making progress, not attaining perfection.