My focus in February is clearing debt. There are loads of tips for how to do it plus February discounts here.
I am not proud of my debt. Most of it I view as essential, e.g borrowing to pay for legal fees for custody. But some of it is because I made some stupid financial decisions.
Disclosure: This post may contain affiliate links for products and services I use.
1. Decided to Dedicate ALL Extra Money and More to Debt
A huge part of reducing debt is changing your mindset. Instead of relying on debt, decide to clear it and focus on how you will do that. I apply this to bad debts such as any debt holding you back from creating the life you want.
Meaning, some people do debt recycling, travel hacking with credit cards or are focusing on investing etc. And that is all fine as long as you are disciplined and the money is working for you. Too many people can’t control their spending and it works against them.
So my first step was to decided that every single extra cent I got this week would go straight to debt.
2. Got Real About Debt
Usually, we have weekly abundance meetings. These have not been happening since just before Christmas and is shows. Spending was up, investing down and debt barely looked at.
I’d say I was absolutely in denial about the debt. I’m grateful it’s not huge but I hate having to pay so much to debt instead of investing it.
Debt is simply robbing your future self. Whatever you pay for with debt today has to be repaid tomorrow. So get out all your debts, write them down, decide what order you will clear them in then do it.
Whether you pay off the highest interest rate first or the smallest debt first is up to you. Keep up all regular payments while you do it too.
3. Bank Bonuses
This week, instead of putting bank referral bonuses in with my regular money, I put them straight on debt. There weren’t heaps this week but every $5 here and $20 there adds up! And you can get them too.
4. Round Up Every Purchase and Account
With so much back to school shopping to do and a few other things, I decided every time I made a purchase, I would round up. Meaning if I paid $47 for something, I would then login to my online banking and transfer $3 to debt, thus rounding up to $50.
Also, every time I checked my bank account I would round down. So if there was $101.63 in there, I would round down by transferring $1.63 to debt and keeping it at a flat $100.
Doing this made me significantly more aware of what we were spending and I also really liked seeing the debt go down.
If you are absolutely strapped for cash and budget to the cent, this might be harder. Small change adds up though.
5. New Income Stream
This is brand new and I am waiting to see how it goes before I share too much information but it produced $320 this week. It will probably fluctuate for a while but if it turns out to be consistent, I’ll share what it is.
6. Bank Error
I woke up one morning with money in an account that had been empty and no reason why. It just suddenly appeared and there was nothing in my statements to show why there was money there.
I called the bank immediately, their team went over it and no one could work it out. Even their digital tech team could not find why my account had shown as zero for so long when on their end it had always had this money.
Once they could confirm, yes, it is my money, I transferred it to debt.
7. Online Surveys
I cashed in a couple this week for small amounts.