From saving to paying off your debts — how to fix your finances in 2021
MAKE 2021 the year you get your finances in order.
Last year was tough for even the most thrifty – and overspending at Christmas will have left many panicking.
Money expert Warren Shute says whatever your situation, it’s time to give your money a New Year’s reboot.
The expert said: “The effects of 2020 have been polarising. Some have been able to save money by not commuting or going out as much.
“Others are struggling with reduced or even no income after the impact of lockdowns. Whatever your situation, January always brings a natural opportunity to look at things afresh.”
From starting savings to paying off your debts, Warren shares five money resolutions to make, with tips on how to keep them.
Next, try to get the best interest rate you can with each provider.
Call them and see if they can reduce the rate you are paying, especially if you are having trouble making repayments.
Once you’ve got your spreadsheet, arrange your debts in order, from smallest balance first to largest balance last — NOT in order of interest rate.
For each debt, set up a direct debit, from your Bills Account, to pay off the minimum amount every month, to make sure you’re not incurring any extra fees.
To attack your debt, you pay your snowball — the surplus money you have left over each month — on to the smallest balance first.
Your aim is to rapidly and aggressively do whatever it takes to pay off that smallest debt.
Why? To get a quick win. You will start feeling good and like you’re making progress.
How to keep this resolution: Once your smallest balance is gone, congratulate yourself — you’ve achieved something great.
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Repeat this and you’ll get rid of your debts one by one, each time feeling that little bit more free.
Momentum is huge in our decision-making and the Snowball System continuously builds it.
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