How to Clear Debt

Something that has come up a lot, including in our recent survey is people want new ideas to help them clear debt.

There is no magic quick fix for clearing debt.

Changing the habits and thought process that got you there OR finding a way to change your circumstances (because not all debt is wasteful consumerism, despite what the media might have pushed for years!)

We can end up in debt for a variety of reasons, many outside of our control.

Getting rid of it can be a battle.

Realistically, there isn't much new that can be said or done to clear debt faster but try these tips.

1. Negotiate: Try negotiating with your providers to see if you can get a lower interest rate, better options, a discount on the debt (thi shas worked for some who are facing job loss etc).
2. Seek the help of a financial counsellor, some charities offer this service depending on your circumstances.
3. Delete the apps and access to them. If you cannot use them or don't have easy access to them, it can help curb spending.
4. Find hobbies outside of shopping such as going for a walk with friends, gardening, explore where you live, join groups in your area to get out etc.
5. Maintain some fun! I don't subscribe to the cut back on absolutely everything and hate your life to grind away and clear your debt. Book in things you enjoy, have activties to look forward to, buy that coffee if you love it. Do it within a budget though. Set a limit and stick to it.
6. Work on percentages. Instead of throwing ALL your extra money at debt, do 50% or something. Then split the rest between savings, investing and fun. This can help you feel less deprived, maintain the motivation for the side hustle you have or whatever it is you are doing to make extra money because you get to enjoy some of it.
7. Compare the energy and time cost vs money gained. With anything you do, evaluate how much time and energy is spent on it vs the financial reward. If it takes a lot of time and energy but only gets you $10, it probably doesn't feel worth it. If it takes minimal effort but gets you a decent amount, do more of it. Too often people focus so much on the little things, trying to save in every possible way, doing it all themselves etc that they miss out on the bigger wins. Be ruthless with your time and energy as well as your money.
8. Have a clear goal beyond the debt. What is it you want in life beside paying off your debt? How can you do that or work towards it at the same time? When life becomes all about clearing debt, it can feel boring and as though you are deprived of joy. A focus of the life you want beyond debt can help.
9. Review your finances, cut back where possible then focus on making more. Read how to do an annual financial review, how to save $10,000 in a year, 80+ side hustles.

​Check out all our articles on debt, including a few past readers stories, Stephs journey and tips from others over the years for clearing debt.

How to be Content with What You Have

When paying down your debt, it is easier if you are happy with what you have and can reduce the urge to want to upgrade.

Surround yourself with like minded people to help minimise conversations that might make you feel less than.

Clean your space and use scents you like to make it feel fresh.

Actively use what you have and remember why you like it.

Think about the life you want instead of the life you are comparing to others. Does what you have provide joy or serve a purpose? Does it align with your values and the life you want not the life others are living? Focus on that instead.

Stephs Debt Update

If you have been following along, I started with almost $60,000 worth of debt, month 1 I cleared over $10,000 and month 2 I failed a little, now we are at month 3.

The main things that moved my debt this month were:

Lower than previous bills. I had set aside specific amounts for my water and electricity but both were less than anticpated so I put over $800 to my debt from that. Making sure I had the best electricity plan for me, utilising the best times to use it, getting draught stoppers etc. Read 17 ways to reduce the cost of electricity for some ideas.

Less driving and being conscious of all the little errands/quick trip to the shops type things I was doing. I saved time and money with this one. To the point where I am reconsidering my need for a car at all. I know I can live without one.

Surveys and market research: Octopus Group was again my best but I also had a few surveys with PureProfile, market research with Octopus Group and one with Farron Research. All up, I got $445 from surveys and market research.

Refunds and offers. This one surprised me. Marley Spoon made a big error with my order, I let them know and the message said they credited $15 which was not good enough but I let it go. Then when I logged back in I had a bigger discount offer. In fact, I got 7 meals + a few things from the marketplace worth $500! You can get discounted Marley Spoon here. I also claimed the $100 fuel credit, $150 kids voucher and a few other things WA has on offer. See what your state offers here.

Sorted gifts: I know the gifts I need to get for the rest of this year and have started planning, shopping and making them. I managed to get a few I really wanted for significantly less than budgeted, saving me $150.

Used up and stretched EVERYTHING! All leftovers were turned into something new, bananas were made into banana cupcakes, all the pants my son ripped through the knees were turned into shorts. Everything was reduced, reused, recycled and nothing was replaced.

To find out more on how exactly I did everything to pay my debt off faster, read the latest update here.

What I Am Reading

​Clever Girl Finance, Expanded & Updated: Ditch Debt, Save Money and Build Real Wealth.

Secure your financial independence and security with small, simple, yet powerful action steps you can take starting today!

In the newly revised second edition to Clever Girl Finance, celebrated personal finance educator Bola Sokunbi delivers an update to the insightful and entertaining installment of her widely read handbook to personal finance for women everywhere. The author walks you through the basics of building a strong and prosperous financial future, showing you how to craft a resilient budget, improve your credit score, pay down debt, invest and build long term wealth.

With this book, you'll:

• Identify your personal money values, goals, and beliefs to help guide your actions.
• Explore mindset shifts and developing good financial habits including overcoming limiting beliefs about money and cultivating healthy financial habits.
• Learn strategies to effectively manage and eliminate debt, such as creating a debt repayment plan, negotiating lower interest rates, and prioritizing high-interest debt.
• Gain insights into different saving strategies, including emergency funds, retirement savings, and other long-term financial goals.
• Learn about different investment options, risk management, and how to start investing even with a small amount of money.
• And much more

Perfect for women looking for practical advice, actionable steps, and real-life examples they can apply to their own financial journey, Clever Girl Finance is an invaluable resource for anyone who wants to achieve financial independence and success!

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