Ways to Pay Off Your Debt Efficiently

With the increase in price after GST implementation together with the currency depreciation, cost of living for Malaysians are getting more challenging especially for those young generation. As a result, young teenagers might use their credit cards more often or not even have enough money to pay off their bills such as cars or housing payment.

Here we would like to show you the ways to pay off your debt efficiently.

1. Know where you spend your money
   
   
   After you got your salary, you should always do a tracking record of all your daily expenditures. Identify all the fixed costs first, e.g. rental, public transport, petrol, etc. Then, record down where exactly you spend your money for daily. Yes, include even a RM 1.30 newspaper or RM 5 coffee. With the records, you are able to understand where do you spend most of your money on besides the fixed expenditures. By doing so, you should then try to reduce that unnecessary portion so that you have additional money for those other debts.
   
   
2. Lower the fixed expenses
   
   
   Try to lower down your fixed expenses slowly from time to time. For instance, you can find a cheaper place to stay if you are renting a room. Or, you can take initiatives to save electricity or water to reduce the amount paid for your housing bills.  With lesser fixed expenses, you are more likely to have more money available.
   
   
   
   
   
   
3. Use your credit card wisely
   
   
   You need to understand that credit card is only for you to delay the payment itself, and you still have to pay it at the end of the deadline. Hence, make sure you don't overspend using your credit card buying unnecessary stuff such as concert tickets or cars when your budget is tight during that time.
   
   
   
4. Sell your lower yielding investment
   
   
   In the case of urgency, you might want to start selling off your investments that are only yielding a relatively lower investment return. For example, if your investment only yields 5% but you are paying for your debt of 10% interest rate, then it is a better choice to sell those investments to pay off your debts instead.
   
   
   
   
   
   
5. Definitely say no to procrastination
   
   
   Make sure you pay off your debt based on the due dates. Do not delay and pass the due dates and end up paying more interests. Get your payment due dates written on your notebooks or set as a reminder on your phones. You don't want to use your hard earned salary to pay for those incurring higher interest which you are not supposed to pay in the first place.

Unless it is really necessary, try not to take out your own savings to pay off the debts. You might need the savings for other more important things. Hence, the best way to pay off your current debts is to stop incurring more debts and pay off your debt efficiently on time.