If you’ve been trying to figure out how to get out of debt for a while, then the idea of building wealth is probably far from your mind. However, it is entirely possible to work on these two goals in tandem. The following five tips will help you do just that:
1. Get familiar with the b-word
It’s one of the most frightning words in the English language, but we’re just going to come out and say it – budget. If you don’t have one, you’re flying blind. You’ll no idea how bad things are or how you’re tracking with your goals.
This is both the problem and the reason why so many people are hesitant to create a budget – there’s a false sense of security in not knowing how bad things are. However, this feeling is an illusion. It may be scary to see your life summed up in numbers. However, once you do it, you’ll know for sure what you can afford, what you can’t, and where you need to direct your funds.
2. Pay off debt the smart way
Everybody’s debt situation is different. Some have a single massive loan to deal with, others are stuck in a payday loan cycle. Still others have lost track of how many small loans and maxed-out credit cards they have. Regardless of where you fall on the debt spectrum, your best bet is to get professional guidance.
Even if you’re a low-income earner, there are non-profits that can help you with financial advice. Do some research, find a reputable financial advisor in your area, and get the professional help you need to pay your debt off and start building wealth the smart way.
3. Boost your progress with a side-hustle you actually enjoy
If you’ve been ignoring the oft-repeated side-hustle advice because you have a mild panic attack at the idea of sacrificing what little down-time you have to doing more work, then you may want to reconsider. Your side-hustle doesn’t have to be a drag. In fact, you can have so much fun with it that it will still feel like down-time.
If you’re a creative type, you can sell your art online; if you have strong opinions about anything from parenting to politics, you can start your own blog; if you play a musical instrument, you can give lessons. You can even make money from getting fit and healthy! Find a side-hustle that matches up with one of your hobbies or passions, and it’ll boost your income without feeling like work.
4. Break your unhealthy money habits
Once again, everyone reading this will be different. Maybe shopping is your go-to therapy when feeling stressed, perhaps you do well all week but then one drink on the weekend inevitably turns into a two-day bender that drains your bank account, or maybe you just can’t resist the delicious simplicity of ordering UberEats.
Even if your vice isn’t on this list, if you’re struggling with debt and an inability to build wealth, chances are you have at least one bad financial habit that needs breaking. It could be as subtle as your mindset about money – are you convinced that it’s hard to come by and only ever earned through hard work and grinding? If so, it may be worth your while to break that scarcity mindset.
Money is far more accessible than it seems to be when you’re stuck in debt. Use the tips above to break down the barriers that have been keeping you in debt and start building your way to abundance.
Feature Photo: Andrea Piacquadio/Pexels