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How to save and get rid of debt

Proper management of personal finances is always a worthwhile goal. Contrary to popular belief, you do not need to be a rocket scientist to figure your finances out. By employing practical knowledge and discipline, you will learn how to save and get rid of debt once and for all.

Here are some things to remember when it comes to managing your personal finances.

Spend smartly

Do you really need another pair of shoes? Do you need to buy that skirt NOW? Do you need to go to every sale? These are some questions that you have to confront if you want to spend smartly. As a guide, here are some key points that can help you make that decision:

  • Can you delay the purchase? A lot of brands hold a mega sale usually from November to February. You can save money for that one huge purchase when the time comes.
  • Are there discount coupons available? There’s absolutely nothing undignified with getting a discount. Why would stores offer such good deals if they were anything but? Take advantage of coupons when you can. It’ll help drive down the cost, and that’s always a good thing.
  • Will it last long? Sometimes, the cheap option isn’t the best option. Why go for cheap shoes only for them to give up on you in a week? Excellent quality lasts longer so you won’t have to keep on buying stuff that you really don’t need.
  • Can old clothes be transformed into works of art? Yes, they can! A dress can be made into a skirt. A shirt can be made into a bag. An old pair of pants can be made into a cute pair of shorts. YouTube and Pinterest offer so many how-to articles and videos in recycling your old things. That way, you can limit your purchases.
  • Ready to hit the thrift shop? There are many treasures waiting to be discovered in thrift shops. Be prepared to dig in!

Stick to your budget

Plan your budget and stick to it. Make sure that at least 10% goes to savings. That way, you can project how much money you can set aside for purchases after taking out necessary payments (rental, electricity, insurance, etc.) and savings. Remember, savings is NOT what’s left once you’ve spent what you want to spend on. It’s a set amount of money that you put in your savings account every payday. Apply this paradigm in your financial management, and it’ll do wonders!

Create different accounts for expenses and savings. Compartmentalise! By being organised, you can better track your finances. Every time you set aside money for savings, transfer it to a separate account. That way, you lessen the temptation of using it for unnecessary or impulsive spending.

Document your spending

Keeping track of your purchases is a significant plus. It’ll help you identify where you are spending too much so you can adjust accordingly. This may be time-consuming but is extremely rewarding in the end. The effort is totally worth it!

You do not need to be a miser or an accountant to learn the art of how to save and get rid of debt. By being wise and organised with your spending, you are well on your way to becoming a pro in personal financial management.

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