If there is one thing that we can all agree on, it is the fact that debt really sucks.
Especially when you’re going through other financial challenges in life.
Research shows that, in some settings, women in Australia are carrying more debt than men – especially when it comes to university HECS debts. Other factors that contribute to why women may have more debt include the gender pay gap and the fact that women are more likely to take time off work for maternity and caring reasons than men.
While some debt is unavoidable or what we call ‘good debt’ (debt that helps improve your finances in the long-term), others can just make you feel like your debt will never end.
Fortunately, debts aren’t forever, and with a bit of strategising you can secure a debt-free future sooner. Here are 3 tips you can use to help you on your journey:
1. Avoid Debt in the First Place
This may sound incredibly obvious, but the fact is that some people keep on getting into debt when they can’t afford it. For example, credit card debt and any AfterPay type debts can be incredibly dangerous and are avoidable.
There are over 13 million credit cards in Australia with a total national debt of $20,8 billion. – Finder.com.au
If you know yourself to have problems handling things like credit cards, then this is our advice to you: toss them. The mindset of “save before you buy” is a great one to have, and it will help you value your money and the things you buy even more!
2. Budget as Much as Possible
We’re sure you’ve heard this tip time and time again. However, if you haven’t employed this tactic yet, you must! Budgeting will allow you to understand precisely where your money is going and will help you avoid overspending.
Even if you are in debt, you can go ahead and start budgeting right now. Doing so will help you quickly identify where money should go and where you can take the money from. This will help you cut down on unnecessary costs and put more of your money into reducing debt.
3. Set Up an Emergency Fund
Although this may not sound like a debt reduction tip, it is still an essential financial tip that every individual should exercise. As the name implies, an emergency fund is a fund that you only access during an emergency.
Without an emergency fund to rely on, you can easily fall behind on your budget and miss minimum payments.
What happens if you do get caught without money to pay off unexpected obligations? You borrow money and get into debt! In other words, having an emergency fund helps you to pay off surprise costs without getting into debt. As such, we recommend you set up an emergency fund that is a few months’ worth of income. This way, you can live debt-free for a while should things go south.
4. Sign up for the Got Money Honey Masterclass
Along with the tips we’ve already shared, there are many more that you can employ to reduce any outstanding debt you may have.
The more tips you apply to your debt reduction efforts, the faster your debt burdens will melt off your shoulders! Sign up for Got Money’s Honey finance masterclass for more debt reduction tips.
Our course was designed by qualified financial planning expert Jen Richardson. Through the 12-module online course, you will not only learn how to pay off debts quicker – but also how to better manage your finances as a whole.
This ladies-only online DIY course offers insights and pieces of advice that you can apply to improve your financial standing and, one day, live a life free of debt!
Got Money Honey is a financial masterclass for independent women to help women master their money and stay on top of their finances. If you are looking for a finance course to gain financial freedom, learn with us today!
