Clarity arrives when you Budget

Let’s allocate 30% of your money for it. Note that at times you might have to sacrifice it by settling for a lesser percentage sometimes.

And the last basket comes down to savings. Of course, you can’t blow all the money that you receive and later realize that you have none left for the times when it’s an emergency, a sudden plan, or in the worst scenario of losing your job. Ensuring to give at least 20% of the money for that is quite essential. If it’s more than 20% it is also good to go!

But how does it help to clear your debts though? Well, your savings part of 20% is where you’ll take your money to pay off the debts. If you remember, sometimes expenses can be sacrificed, it’s for this reason that you can add some to the savings to clear the extra debt that’s over your head.

Higher-interest Debts come first

Here’s how you do it.

• Jot down your debts and their interest rates, high to low.

• Pay the minimum on all to dodge penalties or extra interest.

• Have some extra money? Use it to tackle the highest-interest debt and reduce overall costs.

• Once the top-interest debt is settled, proceed to the next one, and keep going until you’re debt-free!