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Think “Learning” for a Better Budget

Think “Learning” for a Better Budget

Aloha, let’s manage with aloha: Work well, live well.

I’m hearing the B word a lot these days: BUDGET. In my coaching I find that this is the time when all my clients are focusing on goals and objectives for the coming year. The thing is that they are focusing on it only because they have to, not because they want to: It’s time to get those forecasts and pro-formas in!

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While goal-setting with that financial catalyst is better than nothing, and it can be a good thing in terms of better realism with dated business models, the wiser, forward-thinking companies are those who use this time for financial goals connected to career development, service enhancements, and the customer-responsiveness of product. They connect those financial objectives—which will never go away, nor should they—with people objectives.

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What does this have to do with my learning theme this month? Plenty. This is just a short list for starters:

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  • Learn to use a better budget-writing process, where you look forward and not backwards. If your only research is the pattern of your past history + a new quota, no surprise that come year’s end you’ll only get what you’ve always got before.
  • Learn to involve the rest of your staff. In my experience, the more the merrier when it comes to the budget process. A goal for all managers should be banishing any entitlement mentality in staff and replacing it with business partner collaboration. Budget time is a great time to start: If they affect the budget, they should influence it and own it.
  • Learn some new measurements. I’m guessing that ROI has always been in your budget; now how about ROR (Return on Relationships) and ROA (Return on Attention)?
  • Learn that investment is a better word than cost. Asking yourself, What better investments can I make next year? is far better framing for your own thinking than Where can I cut costs? yet you answer the same question in terms of money and time, and cut out those un-worthy expenditures that won’t hurt anyway.
  • Learn to look outside versus inside. Lucky for me, fresh out of college, the first company I worked for never started the budget process until the coming year’s marketing plan was written, and an internal company campaign had been started to inspire us. Then the particulars of the marketing plan was presented in dialogue format to all the managers who’d then write the budget. Customer focus, company focus, then budget planning.
  • Learn to love numbers. Really. Fact of life: work success—not just business success—revolves around them, and once you set a new goal of improved financial literacy for yourself your outlook changes. Befriend someone who works in corporate finance, investment banking, or money management today, and get a window seat into their world: There’s a lot of passion to be felt there, a lot of smarts to get infected with.

Finally, Learn to Learn. I urge all of you now in budget-crunching land: Get that line item in your budget for “Staff Training and Education” and make the numbers work for it to happen. Then, set your own goals in learning and personal growth using that cash: Connect all the dots.

There’s just one Thursday left for our September Learning here on Lifehack.org this month: Comment here or email me if there’s a learning topic you’re interested in for next week. On every other day, you can visit me on www.ManagingWithAloha.com. Aloha! Rosa Say

Previous Thursday Column: Workhack: The Attitude of Q.&D.

Article Reference: The 3 R’s in Business: ROI, ROR, and ROA

Managing with Aloha, Bringing Hawaii’s Universal Values to the Art of Business

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Rosa Say

Rosa is an author and blogger who dedicates to helping people thrive in the work and live with purpose.

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Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

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