Debt. A single world that can lead to stress, anxiety and sometimes depression. For many Millennials, the weight of a debt appears as a monthly payment that they try to ignore to avoid more stress.
Needless to say, the news following a PwC survey stating that the Millennial generation is the group most troubled by financial stress among American employees didn’t come as a surprise. As they got out of the university, their dream of landing a great job got replaced by “adult” responsibilities such as saving for retirement, buying a house, having kids or saving to start a business.
And there comes a point where they realize that they’ve amassed more debt than they can handle. For most, the sky-high education costs buried them more than they could have imagined in an economy where they earn less than the previous generation. Whether it be $5,000 in credit card debt or $100,000 in student loans, any debt can start weighing them down and holding them back from making big life plans.
Fortunately, there is a solution for everything. With a little planning, motivation and focus on the future, anyone can make debt a thing of the past. We asked Bola Onada Sokunbi, a money coach from New York, 5 easy steps to get out of debt. Use them to ditch debt for good.
1. Stop all spending on credit immediately
“You cannot get out of debt by racking up more debt, says the money coach. The key is spending less than you earn. It’s really that simple.”
2. Figure out your big picture
“How much do you owe? To whom? What are the interest rates? What are the due dates? Is anything in collections? It’s important you understand your entire debt picture. Sometimes it’s difficult to look at it, but it has to be done so you can create a plan to pay it off”, explains Bola Onada Sokunbi.
3. Create a plan of attack
“You’ll then need to create a budget that focuses on paying down your debt, she continues. Your budget will outline not just how much you owe but how much you can afford to pay and help you identify what areas you can cut back to help you pay down more debt. You may also consider setting up a side hustle, selling some stuff you own or getting a second job to accelerate your debt pay down. This will all be part of your plan of attack.”
4. Stay disciplined
“The thing about plans is that you have to follow through, or they don’t work, says Sokunbi. So once your plan is set up, you have to stick with it. Surround yourself with people that will keep you motivated. Read motivating books. Remind yourself WHY you are doing this. Debt sucks, and you want to build real wealth.”
5. Tell yourself “Never again”
“Once you are done, be done and focus on putting those funds you used to pay down debt towards accelerating your wealth creation through savings and investment,” she concludes.