Reducing debt is easy in theory but exceedingly difficult in practice. We all need to borrow money at some point in our lives, whether it be to buy a house or start a business.
Whilst debt leveraging can be a useful wealth-building tool, in most cases reducing or removing all debt will result in a higher standard of living. The less debt, the more disposable income you will have.
Implementation and Cost
- List all current loans, outstanding balances, and interest rates.
- Work out your total weekly spend on debt and interest paid.
- Consider debt consolidation or refinancing if it results in reducing your regular interest payments and term.
- Contact each lender and ask for a better rate.
- Increase your regular payments where possible to shorten the loan term.
- Look for any loans you might be able to remove immediately e.g a car lease. (You may be able to drop your car lease and buy a more affordable vehicle out right).
- Remove subscription services that you do not need to reduce monthly costs. E.g Netflix.
- Ask for reduced rates on your car, home, and life insurance.