In Summer 2011, following completion of final year of full-time architecture studies , I found myself in a familiar-to-millions position of owing a small fortune to my bank. I made a conscious decision that Summer to search online for advice and help, in efforts to structure my finances and generally make a 1 year gigantic effort to manage and eliminate my debt. The following is 7 of the best tips from my end, that may help you do the same….. good luck.
1. Budget. I’ll start with an obvious one. Plan ahead and structure your spending, manage your income, expenses and evaluate your repayment targets. My method of payment of cash so each payday I’d lodge it to current account straight away (or as soon as possible). Setting up a savings account subsidiary to you current account will allow you to move your entire salary out of the dreaded compulsive spending danger zone, leaving only your budgeted amount for that week/days at your cash -card disposal. This can be managed over a 24hr banking (internet banking) setup.
2. Sacrifice. Staying in a big red hotel on Racecourse Road is far more expensive than a small green house at James Browne Avenue. Is it possible to opt for a lower price rental? Can you sacrifice 1 year in a double room for a single? Have you any subscriptions/memberships you can part with? (A cheaper gym or mobile phone bundle). It’s good to keep track of your costs needs (bills, food, rent) against your actual spending patterns to see where exactly you are overspending unnecessarily, then target saving on those additional costs.
3. Consolidate. Remember, don’t cut up a bank card unless it is feasible to do so… you will still need to eat. When you begin paying off your loans prioritise in-the-red first, such as credit cards, high-interest overdrafts, repayments which incur large fees if not met etc. Set up a priority list based on this and map it out. Once you have one target debt cleared, such as a credit card, cut it up if it’s no longer needed. A realistic and primary aim may not be to clear ALL of your debt but rather to consolidate and simplify it into 1 single manageable monthly repayment. Speak to your bank about consolidating.
4. Visualise. The bank doesn’t congratulate you on your repayments, so you’ll have to do that yourself. Anything from drawings and sketches of graphs of your progress to post-its of your targets on your bank card, as little reminders. Include milestones and do something cheap and cheerful to celebrate them.
5. The Weekly Shop. Don’t just weekly shop.. master the weekly shop ; ) Preferably, in the same large supermarket every week, where you are familiar with where everything is. Dedicate a good chunk of time to it, say, a couple of hours on Sundays. Never do your weekly shopping while super-hungry. Buy fruit, veg and met in bulk and look for discounts. As meat is most expensive, it’s worth going straight for the package deals (3 for £10.. or whatever) and build your meals around them. Prepare a big breakfast and a big lunch the night before work and generally avoid snacking on expensive junk food. Eat healthy and eat well.
6. Psych-up Get motivated to stick it out until the end. Psych-up for the big clampdown the same way you would gear up for a new academic year, a new sporting season or a course in weightwatchers. Whether you decide on a 1 year, 6 month or a 3 month crack-of-the whip, stick it out until the very end.
7. Exercise. Health is always better than wealth. This may seem like unnecessary advice, but it isn’t. Exercise is free, gym memberships aren’t. So whether it is a walk, jog, swim or cycle get out in the great outdoors, enjoy the fresh air, clear your head, relieve your stress and sleep well.