We understand that debt can be challenging to pay off and usually keeps us from doing the things we want to do. Whether it is personal finance or business finance, getting out of debt is equally important.
The alternative finance firms have been actively helping UK SMEs manage their finance and attain sustainability. But when it comes to personal finance, we are pretty much on our own.
One of the best things you can do while in your twenties is paying off your debts as quickly as you can. This allows you to start saving and plan for your future in advance.
Here are six common excuses you need to stop making and instead pay off your debts so that you can move ahead with your savings.
1: I Only Use the Card for the Reward Points
There are many people who will argue taking the merits of using a credit card for its rewards. In fact, credit card companies offer these reward points so as to make money off of you.
People who earn these credit card reward points carry their balances forward and often tend to pay more interest amounts than getting cash in return. Unless you are entirely paying off your card every month, which by the way is worth, you need to stop using your credit cards (at least until you pay off your debts completely).
2: It is Just Student Loan Debt
Another common excuse that keeps people from paying off their debts is by addressing it as a just another student loan debt. If student loan is the only debt under your name, then great! But if not, then it’s time you address the elephant in the house.
Focus on paying off your student debts as soon as possible, especially if it is from a private lender. There are several ways you can get access to extra money. You can take up extra jobs or work extra hours to let the additional money flow in.
3: There is a Great Sale. I Will Pay It Off Later!
Another common excuse most people use to avoid paying their debts off is that the sale looks very pleasing to avoid. And although they don’t have any money at the moment, they will pay it later with the rest of the debts.
But if you do your math, you will realise that if you are saving 10 per cent on an item now, you will paying 20 per cent in interest later each month. This means, you are just spending more than you are actually saving.
Moreover, it is never a good idea to carry forwards your balances. Unless your situation is critical, clear off your debts before you add on more debts to your list.
4: Everyone Has Some Debt
Only because everyone you know has some debt or the other, it is not wise to put yourself in the same situation. The ultimate truth is if you pay off your debts sooner than ever, you are free to do things you want to do.
So, instead of convincing yourself that, ‘being in debt is okay because everyone else has it too’, pay it off as quickly as you can. Getting rid of your debts sooner, will open doors for opportunities to build a better future instead.
5: I Really Need This
A lot of us find it difficult to understand the difference between necessity and a luxury item. If you are already in a debt like situation and come across something you wanted for a long time, you begin justifying yourself that you need this.
So it is your responsibility to avoid justifying yourself going into more debt for things you do not need.
6: It Will All Work Out and I Don’t Need a Plan to Handle It
The truth is, you will need a strong debt payment plan that helps you get out of debt. It will also prevent you against getting into more debt like situations. A major part of any debt payment plan consists of writing down a monthly budget that you need to stick to and cutting down your expenses so that you can pay off your debts as quickly as possible.