“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them”
– Ogden Nash
It is easy to accumulate debt, but to reduce debt often feels like an uphill struggle. Yet, unless we reduce and manage our debt, we will always be carrying a heavy weight around in our mind. Here are a few strategies we can take to reduce our levels of debt.
1. Increase Earning Power.
The internet provides a great scope for making extra money through blogging. To be successful in making money online is not easy, but, if we are determined and are careful in our strategy it can make a useful second income; some bloggers are able to even retire from their full time job. The secret of making money online is to choose a niche where you are knowledgeable and make your website really stand out from others. You will need to write good content and you will need to work on promoting your articles and networking with others. However, if you are able to do this there are many ways to monetize it.
- Hint: It is also worth choosing a profitable keyword like Mortgages.
Basically, ask yourself are your keywords about things which people buy? If they are advertisers will be willing to pay more.
If blogging does not appeal to you, no harm, there are many other streams of income. The point is that we need to be inventive and proactively look for new avenues of income. It would be a mistake to feel our income is fixed. If we start looking and being receptive other earning opportunities will present themselves. These other opportunities do not necessarily mean a longer working week. Some income streams are compatible with working less. But, our mental attitude is of great significance – it is important we maintain an expectation, or at least aspiration, that we can earn more.
2. Get Joy out of limiting your spending.
A big problem is that for many people they associate spending with happiness. Some even give it the term “comfort spending” When we feel depressed, we know that going shopping will give us at least temporary happiness. If you associate spending with happiness, try to change your mindset: lasting happiness does not come from just putting more on our credit cards.
- Try this exercise. Before buying, always try to think when, how and where you will actually use it. Mentally you can give the good a score out of 10: 10 being very useful, 1 being of little value. If you are unsure, especially when spending large amounts, don’t purchase on impulse. Wait a day, if you really want to buy it you can come back. This will stop you spending on things you don’t really need.
- Another project worth considering is to give yourself a strict cash budget of, say, £70 per week. Pledge to yourself that you will not spend on plastic. Basically, you have an average of £10 a day; this will really make yourself appreciate what you actually have to spend money on. Also, by spending only cash, you can be aware of how quickly money disappears. There is something about buying on credit cards that makes us feel we are not really spending our money. Although this project may seem a little stringent, we will come to learn that our happiness is not dependent on spending huge amounts of money. It will force us to be inventive in enjoying life and not just relying on the power of plastic.
3. Financial education.
If there was any common sense, money management would be on the school curriculum. However, for various reasons people usually start adult life with very limited and sketchy knowledge about financial issues. For example, there are numerous things we need to be very careful about, such as avoiding missed payments which damage our credit rating. Also, if you are in a lot of debt, things such as debt settlements or debt consolidation can make a huge difference to reducing your total interest and debt burden. If we spend 40 hours a week earning money, we should feel the benefits of spending 30 minutes a week to learn about how to effectively manage money and debt. If we can learn to manage our money effectively it will be time well spent.
This is part of Blog Project 3 at Daily Blog Tips