Like your first kiss; car, job, love and heartbreak, chances are you’ll never forget your very first credit card.
Not because of the dizzying high it gave, the sage wisdom it instilled or the thrilling sense of accomplishment you felt.
No, rather because I’m betting if you could go back in time and slap that piece of plastic out of your younger self’s hand you probably would.
For most, credit cards are a burden that’s very hard to tame.
This is especially true for those trying to buy a home.
Credit debt either chews up your disposable income with its interest-heavy repayments or it makes potential lenders run for the hills.
So, here’s how to get rid of it and get yourself into your own home instead.
Get snipping right now
Reach back and remove your wallet from your pocket and take out your credit card.
If there’s more than one, grab them all and sit them down on the table in a row.
I want you to stare at them and contemplate what they’re doing to you.
They might be holding you back from nabbing a loan.
They’re probably sucking up your spare cash with repayments, preventing you from saving a deposit or affording a mortgage.
Or they’re inflicting terrible budgeting habits that are tricky to break.
If you don’t think you can resist the temptation of overspending on your credit card, you should cut them up.
Throw the pieces in the bin, erase any memorised numbers and expiry dates from your head and get cracking on step two.
Look at the books
On a piece of paper, write down every expense you have in a month.
Check over bank statements and stray receipts in your bag to make sure you’ve got them all.
What can you get rid of?
Are there things you can live without?
Be brutal – make some short-term sacrifices for a long-term gain.
What can you save money on?
Can you get a cheaper mobile and broadband plan from a budget provider?
Can you shop around for a better deal on your utilities and insurances?
What can you do yourself instead of forking out for someone else to do?
Make your own lunch instead of buying it every day, opt out of barista-made coffees, or reduce the number of nights out and expensive dinners.
You don’t have to live like a monk, but you’ll be amazed how much those little things quickly add up.
Can you supplement your income?
Do you have a hobby you can monetise or is there freelance work you can do in your spare time?
Write a budget and stick to it
A basic budget should have three main components to it.
They are: lodging, or the cost of your rent or board; living, or the bills that keep the lights on and your tummy full; and life, or the fun stuff that keeps you sane between work weeks.
Most personal finance experts reckon you’ll drop about 30 per cent of monthly income on lodging.
Rent can be expensive, let’s face it.
Your bills are ideally no more than another 20 to 30 per cent of your wage.
And while you’re working towards buying your own property, cap the life costs at 10 per cent.
Go even less if you can.
That leaves between 30 and 40 per cent of your monthly net salary leftover.
And from now until they’re paid off, that amount is going to go on your credit card debt.
Start small and work your way up
Simply paying the minimum amount due on your credit card each month means you won’t be free of that debt for several years or more.
Dig out those monthly statements and write the card balances down from biggest to smallest.
Start with the biggest balance – if you have a few credit cards – because that one is costing you the most in interest charges every month.
That new figure that you’ve set aside to pay credit debt each month will help you smash that bad debt until it’s gone.
Then you rinse and repeat as necessary.
It’s not a walk in the park.
You will find it tough.
Depending on your situation, it might take you a while.
And there will be times when you’re tempted to give in.
But keep at it and don’t lose sight of the prize – you in your own home.
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