Eat good food, cut down on unwanted expenses, exercise daily, disconnect digitally and connect with people offline. So many resolutions, so little time. If you also resolved to live a healthier, social and financially smarter life- you’ve brought in 2021 on the right note. After all, 2020 has redefined our outlook for life in many ways. 

Resolutions are great provided you stick to them. A year ago and the year before, you had the same plan. But the actions didn’t quite align. How do you stick to your resolutions? With financial well-being on your priority list, how do you ensure your finances are in shape and you’re living a debt free life? Here are some habits you can imbibe to ensure you are socially distancing with debt for good. 

1. Mask your spending 

Start with writing your income and expenses. What portion of it goes towards fixed expenses? Given these expenses are mandatory, analyze the available disposable income to map out your variable expenses. Budget your savings and future investments within these costs. Once you’ve taken stock you’ll be in a better position to determine how much cash you have available to spend and mask unnecessary and unwanted expenses. 

2.  Sanitize your current debts 

Start with listing how much debt you owe and the interest rate you are paying. Include your credit card bills as well. Always pay the minimum or due bill amount, don’t roll it to the next month. Where you can, automate your debt payments to avoid late fees. You can opt to take up a side hustle and make extra money for repayment. Curb any additional expenses until you’ve cleared your current debt off. 

3.  Focus only on necessities

A penny saved is a penny earned. If you have too much debt, accruing more puts you at risk of the debt chain. If one thing, 2020 has taught us, it is that adaptability and survival on minimalism is a good measure. You don’t need a lot, you need to plan, budget and stick to essentials. 

4.  Zoom on the debt snowball method 

Focus on debt repayments and commit to clearing them on the target dates. You can start by clearing debt with the lowest amount. Debt management and payment should be ruled with facts, numbers and a well-devised time-bound action plan as opposed to emotional decision-making. You can seek the help of an advisor to set up a budget and develop a debt repayment plan.