I appreciate you asking. First of all, I’m sorry to hear that you lost your job. There are specific strategies that can be put into practice to pay off debt in a strategic manner.
Choice 1:
Make a list of all of your debts, working from the one with the highest interest rate to the one with the lowest.
Concentrate your efforts and resources on the debt with the highest interest rate while making the minimum payments on the debts at the bottom of the list.
It’s a good idea to stop it in its tracks and pay it off as quickly as you can because the interest will accumulate here the quickest. When this debt is paid off, add the monthly payment you made on it to the payment on the debt with the current highest interest rate.
Because the instalments you used to pay off your previous debts are now concentrated on the next, you’ll notice that your instalment for the next debt increases every time you pay off the debt. It ought to have a snowball effect, allowing you to pay off the debt more quickly.
Choice 2:
List your debts using this method, starting with the ones with the largest balances. Once more, you continue to pay the minimum on your other debts while concentrating all of your efforts on the debt that is highest on your list. This strategy will help the large sum appear smaller more quickly, which some people find more motivating.
Making a list of every debt could be extremely difficult. If at all possible, continue making the minimum mortgage payment on your home if you want to keep it.
Spending money or paying off debt
Most people have both debt and savings, and very few people pay off their debt before they begin saving.
Here, it’s important to concentrate on the debt’s interest rate and take into account any potential investment returns. Additionally, paying off your debt first would be preferable if you have a lot of debt that is beginning to overwhelm you in order to keep your stress levels in check. Additionally, keep in mind that it might be challenging to borrow money in the future if you have too much debt. Additionally, having too much debt to pay off limits your capacity to make long-term investments.
Although your mortgage bond is typically a less expensive form of debt, it can be stressful to pay off your bond and be left penniless while awaiting your UIF payment. Keep in mind that you’ll need to make sure you have some cash on hand while you look for alternative employment.
In light of the foregoing factors, it would be ideal to strike a balance between controlling your stress, paying off high-interest debt, and making sure you have enough money to cover your living expenses until you find employment or until UIF pays out.
