Paying Off Debt
Shifting pounds, saving pounds: I reckon paying off debt is a lot like losing weight.
If you keep on doing what you’ve always done, you’re not going to lose any weight or save any money.
With both, the key is to make changes. They needn’t always be big changes, because small losses, and small savings both add up if you keep at it. Sometimes we all fall off the wagon – we’re only human – but it’s absolutely possible to get back on track.
With weight loss, you can either eat less or exercise more, and it works most effectively if you combine both. Same with saving money or paying off debts: you can either spend less or earn more. Do both, and you’ll drive any debts down much faster.
Like losing weight, it helps to give yourself a target. You might need to be stricter with yourself while you’re shedding the pounds, or saving £££s, but it won’t be forever. Sometimes you have to go without stuff in the short term, and then reintroduce it later, when you’ve shed the weight or the debts.
Just like there’s no point regretting all the cake and cocktails you’ve already eaten, there’s no point regretting the money you’ve already spent, or the times you fall off the straight and narrow (and there will be times you spend more than you meant to, or scoff all the donuts, whatever your best intentions).
Don’t beat yourself up. Enjoy the memories, and move on. Today is a new day – you can make small changes starting right now.
Be realistic about your debts. Think about what you spend, and what you might be able to switch or shrink, just like you might make food swaps. How long is it going to take to clear any balance? 6 months? A year? Two years? More? Just like putting on weight, you probably didn’t build up debts overnight, so you’re not going to pay them back before next Friday either. Unfortunately that debt-slashing lottery win is a lot less likely than drastic gastric surgery as a rapid fix.
So maybe you will have to go without some stuff you like, to save money, just like you might need to swap some of the cheesecake for cottage cheese to shed weight. It won’t be forever. Focus on the bigger and better picture.
Debts are a heavy weight round your neck. It’s not just the money, but the arguments, the sleepless nights, that anxious feeling at the bottom of your stomach. Being overloaded with unsecured debts like loans and credit card balances can scupper your chance of getting a new mortgage, and moving to your dream home.
Now think about a debt-free future.
Think about how much better and lighter you’ll feel without debts.
Think about how much better life would be for your family, if you could spend the money that currently goes on repayments.
Think about the freedom you’ll have to save for a holiday, for Christmas, for a new house, if you’ve paid off your debts.
The theory is pretty simple. Putting it into practice is harder. Heck, if it was easy, we’d all be rich and slim. But losing weight and shedding debts are both absolutely possible if you put your mind to it, stick to it, and don’t beat yourself up if you fall short of perfection.
So here’s the summary:
- Yes, you’re going to have to make changes. If you keep on doing the same old stuff, and spending the same old money, you’re not going to shift those debts and may even add to them.
- No, it doesn’t have to be forever. Give yourself a deadline, work at it whenever you can, and look forward to reintroducing some stuff when you’ve shed the debt. Just don’t go straight back to all your old habits, or you’ll end up right back in the same position.
- Ditch the regrets. No point crying over spilt milk or spent money. Give yourself permission to make a fresh start.
- Make it manageable. I’m not recommending moving into a cardboard box and living on smart price noodles. Crash diets don’t work in the long term, and extreme money-saving tends to send people spiralling off into a spending spree afterwards too.
- Build in treats. Everyone needs stuff to enjoy, but try to find lower cost alternatives. Look for ways to reward yourself, and your nearest and dearest, that ideally don’t involve spending cash.
Faith Archer is an award-winning money journalist who also writes the blog “Much More With Less”, about moving to the country, living on less and making the most of it. She doesn’t have any debts, but could definitely do with eating less cake.
Thank you Faith for a fabulous guest post. Faith has been a great help to me recently helping me to review my personal budget, even money bloggers benefit from the different views of others. Faith often features in the financial press regularly appearing in The Times and The Mirror amongst others. So keep an eye out for her and do check out her blog.