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That dreaded word debt, we all have it!
Well most of us do in some form or another, whether it be credit card debts, student loan debts, home loan debts, car loan debts or business loan debts which are preventing the majority of us from travel.
If you don’t! Stop reading this post because you are awesome and we are proud and jealous of you for it!
My wife and I are currently shedding the evils of debt off our backs little by little, one by one and have compiled a helpful list of tips on getting out of debt.
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Today’s society is to blame for the increasing personal debts!
I began my relationship with money over 20 years ago and was pretty darn good at it! My rule of thumb was pretty basic.
Earn some money, try and spend hardly any of it and save it up for whatever you really wanted! simple.
And my number one rule was don’t get any debt, just pay cash!
That was all fine when I was single, and that was 20 something years ago, so money has got a lot easier to get a hold of these days, with credit cards, higher purchase cards, personal loans etc.
Today’s society revolves around having everything right now, unlike the older generation where it was about working hard towards what you wanted, nowadays we just put it onto credit and try to pay it off!
Advertising and marketing magic spells!
Advertising and marketing have gone crazy, enticing us to buy all the new shiny products, keep up with the latest trends, have a nice house, a nice car, great education, travel to exotic destinations and be prepared for your retirement.
And after all that, we are meant to save some money! What! There is no way you can do all that and not be in debt, especially if you have an average income stream. This is where the debts begin because you can have all this but at an ultimate cost to your freedom in the end.
Banks have hundreds of products available to entice customers to get into debt and all you have to have is a job, an address and be able to fill out a form with some ID and bang you are in debt.
A debt will stop you from travel!
We have all heard it before, “I can’t afford that, with the mortgages, car loans and kids school fees I have no money left for taking holidays”
This is why managing your money is essential if you are passionate about travel and experiencing new worlds and what they have to offer. By getting out of debt, you will have the freedom to do and experience more out of life and really live your dreams and make them come true.
Why money and travel are important?
You need excess money to travel, buy plane tickets, book accommodation, hire a car, eat delicious food or take part in some great activities. Having a higher debt will limit your choices for particular travel destinations, limit time or worst of all limit all travel.
Slave to the wage we like to call it, if you don’t have any freedom or money to do what you would like, your home becomes your prison.
How do you travel if you are deep in debt?
Do you get into more debt for that little holiday? Or do you try and get out of debt altogether? Learning to pay off all of your debts will make your whole life a lot easier.
If you want to travel more you need to get out of debt now! Before you end up spending your life not traveling and just working. Here are some of our tips for getting out of debt so that you can travel more.
Tips for getting out of debt,
Tip number 1,
Create a Really Realistic Budget for all your expenses. List all your expenses, such as mortgage repayments, car repayments, insurance costs, healthcare, gas, electricity, water, telephone, groceries, alcohol, cafes, internet, servicing, school fees, sports fees, misc loans and any other realistic living cost you may occur in a spreadsheet or a simple piece of paper.
Now divide the expenses into 3 separate columns which will consist of
- Fixed expenses, (Mortgage, Rates, Insurance, Telephone, Loans)
- Variable expenses, (Fuel, groceries, entertainment, travel, sport)
- Bad debt expenses, (Credit cards, higher purchase loans)
Fixed expenses are the most important and they are a fixed so money must be kept aside to pay for these first.
Then you have your variable expenses which the remainder of your income will cover, these can change or be changed. This is where you will allocate money for savings also, such as saving for your travel. With variable expenses, some helpful tips would be;
- Minimising on eating out at restaurants or takeaway.
- Cutting back on certain items in your grocery bill. (Junk food)
- Driving your car less. (walking or riding a bike)
- Spending less on fashion, reuse.
- Participate in free sport or exercise programmes.
There are many ways you can cut back on your spending, you just have to get creative with it and ask yourself what is important to me so that I can save money for travel.
You want the money going out to be less than the money coming in, that is the rule, simple but hard to do for a lot of us in today’s society.
If the money going out is more than what is coming in then some changes need to be made to the variable expenses such as mentioned above, (getting rid of pay tv, stop paying for Netflix or buy less chocolate etc.)
Tip number 2,
Stop spending money on your credit card, if you know how to use a card properly they are really good to have.
The problem is that most people don’t know how to manage money properly and get totally out of control with their spending because it is so easy to do. I find the new Paywave system is really bad for people who cant manage money, you just tap the card and you have paid. So you can just go around town taping your card without actually seeing what you are spending.
I personally have gotten into trouble with this one, but with a little bit of tracking you can overcome spending more than you have and falling into debt. Stop using them until you have paid off the balances because they will just incur more fees, and rise up and up and up.
Tip# A good tip is to use cash instead of a card, that way you can see exactly what is going out and what you have left in your hand to spend without spiraling out of control.
Tip number 3,
Look for extra ways to make money, there are so many different ideas you can choose from such as;
- Such as selling goods from around the home on eBay or have a garage sale.
- Start a part-time online business from home and follow your passion. Learn how to be an Affiliate Marketer here.
- Get a second job to save a few extra dollars.
- Sell home made goods at your local markets or online market places such as Etsy
- Rent out one of your rooms. Try Airbnb here.
- Hire out your caravan, campervan, motorhome or camper trailer on Camplify.
- Freelance your skills to companies. Ever heard of Fiverr?
- Create an online course using your skills and sell in on the web. Teachable is an easy to use platform for this.
- Create an ebook to sell online.
These are just some of the ways you could earn some extra money so that you can travel more.
Tip number 4,
Get your debts nicely organized so that you know the exact position you are in. You can do this by getting hold of all your financial statements adding them up and seeing what kind of position you are in. This will help you with the planning side of things.
Tip number 5,
Evaluate your living situation, your housing costs should not be more than 33% of your total income stream. Some great tips to save on living;
- Shop around for lower insurance deals.
- Refinance your home mortgage.
- Look for more economical utility plans.
These little changes will make a big impact on your bottom line and probably give you some extra cash to travel and persue your worldly dreams.
Tip number 6,
Pay off your debts in an orderly fashion, such as pay off the small debts first and work your way up from there. Once you have paid off the first debt, the money you used to pay off that particular debt goes onto the next debt plus the minimum payment required.
Here is a little example that you could follow or try at least,
- First debt of $500 dollars you are paying off at $50 dollars per month, once that is paid for now you move to the next debt.
- Second debt of $1000 dollars has a minimum payment of $50, so now you take the $50 from first debt add it to the minimum payment of $50, you are now paying off $100 dollars of the second debt until gone.
- Then continue on following this rule until clear of all debts.
It will take time to get out of debt!
Be patient, it will take time to make the change, I am not the most patient person either so when I put these tips into practice I became frustrated at times and just wanted things to happen straight away.
If you just keep your focus on what is important in life and don’t sweat the small things it will all work out for the best in the end and you will become more financially free to do the things you are more passionate about.
Just take small steps at a time and you will progress, set the goals and plans in place for the future, take massive action and create a better life for you and your family.
Good luck financial guru’s.
“YOU WEREN’T BORN
TO JUST PAY BILLS