Tips To Get You Out of Your Debt Slump and into Investing

At Investors Edge, we specialise in Perth property management and the buying and selling of investment properties in the Perth market. We have worked with a lot of investors over the years helping them make money, save money and sleep well.

However, it isn’t always easy. Often our initial consultation reveals that the client needs to do some serious work on reducing their debt and getting their budget under control so they can secure funding for investments. Debt can be the biggest roadblock between a would-be investor and their dreams. If you have too much debt, here are some steps you can take to reduce it.

How Much do You Owe?

To start reducing your debt, you need to know exactly what you owe and to whom you owe it. Make a list and check it twice.

Organise

Create a well-organised spreadsheet that succinctly and accurately lists all of your debts and your total debt. And list any interest rates that the debt is attracting.

Reduce Discretionary Spending

This is a sticking point for many. Do you go to a coffee shop on the way to work? You can save a lot of money by making your coffee at home. Ask yourself if you really need to buy it.

Formulate a Clear Goal

You have to have a plan or a goal. For example, “pay off x amount of debt in x months” or “all credit card debt paid off by x.” When you are tempted to overspend, remembering your goal can keep you on track.

Commit to a Cause

You are going to find a compelling cause or reason for getting out of debt. For example, “to enable a great retirement lifestyle.”

Pay Your Smallest Debts First

This looks better on your credit and makes your process “cleaner.” Watching your debts fall one by one can be a great motivator, too. Also look to prioritise the highest interest rate.