Many New Zealanders find themselves in debt and don’t know where to begin. Paying off your credit card debt can often seem overwhelming, so we’ve put together some tips to help you manage your finances and pay off your credit card debt faster.
Understand your money
The key to getting rid of your credit card debt is to get familiar with your spending habits and create a budget. Take a look at your bank statements and track your incomings and outgoings. List your essential and ongoing expenses so you can then budget for what’s due. This should be reviewed weekly to see where under or overspending occurred.
Cut down monthly expenses
Now that you understand where your money is going, you can aim to reduce your spending and allocate more of your income to paying off your credit card debt. Although it’s important to stay on track, you should still make time to enjoy yourself. Try to have dinners and drinks with friends at home instead of going out, use free streaming services instead of paid, and go on local walks on the weekends.
Create a payment plan
With more money allocated to paying off your debt, it’s time to create a timeline. Depending on your balance, you should determine what monthly payments you can afford. Now that you know how much debt you have to repay per month, you can work out what you can spend outside of your essential budget.
Doing the hard yards
Committing to paying off your debt can be challenging. It will take willpower and discipline, but the freedom that comes with it is priceless. As you make serious contributions towards your credit card debt, some months may be harder than others. But by sticking to your regular repayments and cutting back on costs you’ll see things moving in the right direction.
Celebrate your win!
Once you start reaching your repayment milestones you’ll be even more motivated to continue, and eventually, you’ll make your last repayment. This will be a massive achievement so don’t forget to celebrate this win and treat yourself to a celebration.
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