Everyone is different and so is the size of debt. One thing we can all agree on, is that having debt, is not a nice feeling. Although we know it has to be cleared, at times we can’t think of anything we’d rather do less!
Clearing debt for me use to feel like throwing money in to a black hole.
However, I had to come to terms with the fact that I owed money to the bank and it wasn’t going to go away. I could have all the savings in the world, but until I’ve cleared that debt, my savings are compromised.
THE ACTION PLAN
For ease of the example lets say your net income every month is £2,000
We divide it up in to 3 sections.
10% – Gifts, Tithe, Charity Donations, Emergency fund etc. Whatever your chosen lifestyle supports.
40% – All essential bills including travel & food (This also includes luxuries like eating out and clothes shopping)
50% – Debt. Debt. Debt. Clear that debt!
OR
10% – Gifts, Tithe, Charity Donations, Emergency fund etc. Whatever your chosen lifestyle supports.
60% – All essential bills including travel & food (This also includes luxuries like eating out and clothes shopping)
30% – Debt. Debt. Debt. Clear that debt!
The above is just an example and you can adjust the percentages to suit you.
Disclaimer: This worked for me as I was married and able to divide all household bills and essentials between 2 people. Due to this, I cleared my debt within 3 months. I do understand that this may not be the case for everyone and it may take longer to clear debt as a single person as your outgoings may be a lot higher. If you still live at home with parents or family, you have no excuse! Contribute, but save!
Something we can all do is cut back on the luxuries and use every spare cent to clear that debt.
Now that many of us are working remotely, we are saving a lot of money on travel, lunch and after work socials so no excuses!
Let me know how it goes. Let’s clear debt!
