Stay out of debt
So, you've taken the first step to getting out of debt by applying for a consolidation loan. A consolidation loan provides you with an opportunity for a reset. A change in mindset. You've taken the first step to getting back your life. You've identified your triggers and come up with a strategy to save more and spend less.
Now you need to focus on sticking to these habits and start thinking long-term. In other words, you need to manage your consolidation loan properly. That means monitoring how much you spend and sticking to your budget.
There are four ways in which you can keep your debt under control. Let’s take a look...
Don't borrow more than what you need
When applying for a consolidation loan, try not to borrow more than what you need, even if you qualify for a higher amount. A higher value loan will take longer to pay off and you may be charged higher interest rates.
Reduce your monthly expenses
Can you spend less each month? Cutting down on even the smallest expenses can make a huge difference! Consider measures like canceling your satellite TV subscription to save on entertainment costs, or switching off the geyser to save on energy costs. Try to avoid eating out — rather cook at home to save on meal costs.
Stop relying on your credit card
Start using your credit responsibly and optimally. For example, make it a habit of paying more than the minimum owed each month, if you can. Even better, consider using cash or your debit card. Using cash removes the temptation to spend more than you can afford. You also will save money because you don’t have to pay credit card fees and interest. However, try not to cancel your credit card as this will hurt your credit score. Instead, use your credit card in emergencies only.
Start an emergency fund
Now that you've consolidated your debt and taken the first steps to live your best life, it's time to start thinking about the future. An emergency fund is a great tool for keeping your debt under control. Many people turn to loans or credit cards to take care of emergencies, and while this is sometimes unavoidable, an emergency fund will cover some of the costs involved and keep your debt at manageable levels. It takes some discipline, as you won't be allowed to use the funds in the emergency fund as and when you please, but it will pay off in the long term.
It is possible to manage debt?
There is life after debt. Managing your money can be a learning process. It just takes a bit of commitment, planning, and optimism! What matters is how well you use the lessons that you learn. If you think that consolidating your debt would help, click here.