How to erase £670 of debt in a year with an easy money challenge

STICK to an easy money saving challenge can help you clear almost £670 of debt this year.

If you start by saving just 1 pence today, you could pay off hundreds of pounds of your total debt in just 12 months.

1

An easy savings challenge can help you reduce your debt

The challenge works by increasing the amount you pay by 1 pence each day.

The second day means you stash 2p, and the next day it’s 3p and so on.

Around this time next year, or on day number 365, you’ll be paying £3.65 a day, roughly the same price as a takeaway coffee.

By the end of the challenge, you should have cleared £668 of your debt.

Keep in mind that some debts may be too large or need to be paid too soon to use this method, such as rent arrears or utility bills.

In this case, you should contact your landlord, supplier or other lender to find out how they can help you.

Also, be sure to stick to any repayment schedule you’ve already agreed to and meet your minimum payments.

If you have debts in many different places, it may be worth consolidating the pile with a 0% balance transfer card.

There is no single way to get back in the dark, as different tactics will work for different people.

For example, some people prefer to tackle their biggest debts first, the so-called “avalanche method”.

But others start with the smallest, finding that paying off a debt is a motivational boost that helps them erase the bigger ones later.

This has been dubbed the “snowball method”.

Using the 1p challenge could mean you pay off your debts more slowly than other methods and could cost you more in interest.

But you may find that it’s a lasting way to control your finances.

When it comes to debt, one of the most important things is finding a technique that works for you.

Here are four tips to get started:

Understand what you owe

It’s easy to get your head in the sand about what you owe.

But you need to know how much debt you have and make sure to calculate a budget based on your expenses.

Any extra money can be used to pay off debts with the highest interest rates after making all minimum repayments.

Talk to your lenders

One of the first steps you should take is to talk to your lenders.

You need to be upfront about how you are struggling to make your repayments.

hey could agree to put you on a more affordable repayment plan.

Get free debt help

If you’re losing hope of reducing your debt, it might be time to get some free debt advice.

There are a number of charities and organizations that will help you for free.

Pay more than the minimum

You should try to repay more than the minimum repayment amount each month if you have more than one debt.

This will help you pay off your debt faster, but you could also save up to thousands of pounds in costly interest charges.

We pay for your stories!

Do you have a story for The Sun Online Money team?

Comments are closed.