Practical Solutions For Solving Debt
Worried about facing into another year of debt? Or maybe you're just looking for some practical tips for saving?
Carol Tallon was live in studio this morning to chat about the issue of debt and how the most minute of changes can make a big difference.
Carol's Top Tips:
- The first step is to identify where exactly you are financially (income, spending, savings, over-spending, debt...)
- The next step is to accept it; this might sound a bit metaphysical but it is important. If we cannot where we are and the part we played in getting there, then we get stuck in this victim-state (very common among the negative-equity generation).
- Acknowledge the poor decisions we made and learn from them; recognise the poor habits that made your financial situation worse and resolve to change them.
- Agree to spend one minute each day to stay on top of financial (spending/savings) goals but checking your balances, noting recent transactions; question how necessary the purchases were - just this simple act alone will stop any unnecessary spending that day - and of it works one day, try it for two... and so on. Doing this with a friend is a great way to keep you both on track.
- Keep a record of spending, even commit to doing it for a week - I promise it will shock you!
- For example: Gym membership might sound like an investment in yourself but if it is only to make yourself feel better rather than you actually using it, it is a waste of money. A wiser investment might be two or three sessions with a personal trainer/nutritionist who can set you on the right course.
- One of the sneaky bad habits is spending up to €10 per day on take-away coffees, this is on top of lunch and meals out - reducing this will make a big difference.
- Set a saving goal i.e. no take-away coffees for a year could save enough to finance two weeks in Bali!
- Automate savings but separate them i.e. notice-period savings account for big items like mortgage/car; an accessible savings account for unplanned events like a car breaking down or perhaps an unexpected opportunity; finally, create a specific savings account or cash box for specific items - for example, I save €1 coins for things that bring me joy (my €2 coins go towards parking in Dublin!)
- Finally, remember to Budget for joy - the whole concept of financial freedom is freedom from worry so that we can enjoy life.
- A few years ago a friend of mine told me how she scratched her shopping 'itch' by browsing online, going so far as to put items into her virtual basket but logged out just before going to checkout - this sounded crazy me at the time but it's exceptionally effective to rid the impulse urge!
If you'd like to join a Facebook group for support, check out Carol's own page where she'll be setting up a group for people looking for advice!