It really doesn’t matter how long you plan on travelling or where you intend to go, managing your money is essential. If you can understand how to get out of debt, you will be able to achieve the freedom to experience more things, be stress free and travel more. You should always try to get your debt under control before you head off on your travels – paying off your debts will make your life a lot simpler and enjoyable. If you are a traveller then staying as debt free as possible is essential! You should never be worried about talking to your bank, they can give you great advice. For evidence of this great advice you should try and talk to the Halifax. Here are 5 great tips to help you clear your debt so than you can get out there and travel more:
1) Write down your budget
Now you have taken the decision to become debt free, it’s time to start looking at your spending habits. Remember, you can’t spend more than you have. It is essential to create a budget so that you can check exactly how your money is being spent. When you categorise your spending you should create 3 main categories; Fixed expenses – these are items that you pay each month over a period of time that can’t be changed, for example, rent or mortgage, utilities etc. If you need some advice with your mortgage then it’s a good idea to give the bank a call, Halifax mortgages department offer good advice. Variable Expenses – this includes dining, entertainment and food shopping. Debt Expenses – Loans, credit cards etc. Once you have a good look at all of your expenses and income it is time to start deciding how much you can afford to pay off your debt each month.
2) Understand your credit cards
Credit cards can be very good financial tools if you know how to use them in the correct way. You should always try to pay off all your credit card balance before you head off travelling, they are extremely useful when you’re on the road.
3) Learn about your debts
Before you can become debt free you must first understand your debts, more importantly you should understand how much it is that you owe. It can sometimes be a little worrying when adding up all the figures but this is the only way to realise how much you owe and to have a target to aim for.
4) Work your way up through your debt – pay it off smallest to largest
It’s good to try and get the smaller debts paid off first so that they are cleared, leaving you with less companies to deal with. This means less of a headache when it comes to paperwork. It is also a great feeling when you have finished your debt with a company.
5) Understand that this takes time
You have to understand that getting out of debt will take you time. Remember how many years it took to get you into this position, do not expect this to be over within a week. It is time consuming but worth every second you have to wait. Before long you’ll be debt free and looking at your next destination on the map!