When it comes to money management, setting bite-sized money goals is a financial technique that can eventually become a good money habit, especially if one has a financial objective in mind. Committing to our personal finances and breaking down monthly debt repayment into more bite-sized, achievable money goals is an excellent way to prioritize our finances.
In order to help you become financially savvy, we share tips and advice to help you eliminate your debt by breaking it into more manageable amounts. It's all about doing the little things that add up to big things.
When it comes to your personal finances, there is no better time to start than today. You can gain momentum toward a healthier bank balance by setting small financial goals through concentrating on your smaller debt, which can include credit cards, clothing accounts, and other credit we normally spend too much on.
The best course of action is to develop an effective plan to work towards.
Here are some quick and savvy tips to help you set the bar for your monthly bite-sized goals:
- Keep things simple by concentrating your efforts on a few of your high-debt accounts that need attention. A focussed view can sometimes make all the difference in the world - as trying to make additional payments towards all of your debt at once can be overwhelming. By breaking your debt repayments down by most to least costly, you can prioritise the most expensive debt first – and then make an additional payment towards the balance of the most expensive. This means you will reduce the balance faster, freeing up money you can then assign to the second most expensive. Keep in mind, the most expensive debt may not be the one with the highest monthly instalment, but rather, the one with the highest charges in terms of interest rate, fees and additional costs.
- Being pushed out of our comfort zones can often put us to the test in terms of learning better money management and budgeting skills. So, the next time you find yourself in a challenging situation, try not to be too hard on yourself and instead see those challenges as learning opportunities. To learn more about your money and the four pillars of personal finance, visit the Money Academy.
- Try to avoid incurring additional debt, even if it appears difficult at times. Unless absolutely necessary, one of the best ways to approach products or items we don’t really need is to apply the 30-day rule. This is an excellent way to avoid overspending on personal purchases - If you really feel that you want to splash out on an item, wait 30 days before purchasing it. This will give you some time to consider your potential purchase, and, if you didn't find a need for it after 30 days, chances are you didn't need it at all.
When personal finance management is broken down into bite-sized chunks, it doesn't seem as daunting.
