Pay your debts before you save
When you borrow money, you pay interest. When you save money, you earn interest. But the interest you pay on debt tends to be higher than the interest you earn on savings. While it’s important to save, it’s more sensible to use extra cash to first pay off your debts. Once your debts are settled, you can then start reaping the rewards of saving your money.
Don’t reopen accounts you settle
When you consolidate your debts into a single account, do not fall into the trap of reopening or reusing credit facilities that have been settled. This will only complicate managing your money.
Beware of low monthly repayments
Loans offered at low monthly repayments can be tempting. But repaying a loan over a longer period will see you spending a lot more interest. It’s always best to pay off loans as soon as possible.
Put together a budget
Budgeting comes down to knowing what you earn and what you spend – it’s a valuable tool to help you manage your money. Pay necessities, debit orders and repayments first, right after payday, so you know exactly how much you have left to spend for the month.