Cliched as it sounds, one of the first steps to getting out of debt is to actually realise and acknowledge that there’s a debt issue that needs to be resolved.
Once you’ve done that and evaluated the level of debt you’re in, consider half the job done.
It is absolutely essential to realise exactly what you are dealing with when it comes to debt. However, if you expect to get out of your credit woes, you’ve got to understand that it's going to take some hard work and commitment on your part. And it all starts with a change of habits or circumstances, where feasible.
Unfortunately, there is no formula, no magic, and no one-size-fits-all solution to this. If it took you time to get you into debt, you’re going to need time to get out of it. But, above all, you’d need careful guidance to get your finances back in shape. As we exit this tough year 2020, remember that it is never too late to ask for help and advice when it comes to managing your money.
We’ve curated top five ways to get rid of debt and sashay into 2021 stress-free.
When you start to cut back on spending, you’d find corners that you can cut throughout the month. The simplest of changes in life, like being aware of all of the electricity you use, and turning off lights that are not needed as you leave a room, will help reduce your light bill, and in turn, spare you a little more cash. Once you become aware of your everyday spending habits, you’d start to notice more such ways to cut back each month.
Budget your income. List all of your monthly bills and their due dates. Apply them to your budget as well as other household needs. Allow yourself a fixed amount per month to spend on miscellaneous things or small luxuries. In the long run, sticking to your budget will build self-control, and determination for reducing your debt.
Use credit cards wisely
If you feel that you can’t afford something, don’t buy it. It’s really as simple as that. If you have to charge purchases on your credit card, make sure to pay the balance in full when your next credit card statement comes in. Never pay the minimum monthly amount as that would mean you keep paying interest, creating a vicious cycle of building more debt.
Pay off all debt
If you’ve already acquired some debt you need to pay off, now is the time to get started. Decide which debt is your smallest and start with that one. Once you’ve paid off your smallest debt, you’d get more confident about paying off the bigger ones. Calculate your move to the next one using the aforementioned tips without feeling overwhelmed. And before you know it, all your debt will be paid off and you’d feel a huge sense of relief (trust us, there’s no bigger satisfaction as this).
Seek credit counselling if you’re unsure where and how to start working on your credit woes. Reaching out for the right guidance when you’re in need of financial help is a brave thing to do. Speak with credit counsellors at Credit Bureau Singapore (CBS) that provide you with more information on personal debt management, call them on their hotline at 6565 6363, or simply write to email@example.com. CBS is the only Consumer Credit Bureau in Singapore that has a full-industry upload by all card issuing banks and financial institutions in the country. Today, CBS, an associate company of The Association of Banks in Singapore, has 30 member banks and financial institutions.
This article is originally written and contributed by Credit Bureau Singapore.
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Credit Bureau (Singapore) Pte Ltd (CBS) is Singapore’s most comprehensive consumer credit bureau that has full-industry uploads from all retail banks and major financial institutions. CBS assists members in their credit approval process and protects their credit profile, by providing objective and factual information collated from members.