Like your physical fitness, your financial fitness has a significant effect on your quality of life and happiness. Accumulating too much debt can weigh you down financially and limit your ability to achieve your goals. If you have been ignoring the state of your finances, it may be time to whip them into shape by joining our Get Financially Fit in 7 Days Challenge.
While you won’t break a sweat, we guarantee that you’ll make some serious financial gains towards shedding excess debt by following our simple step-by-step approach. Ready to benefit your bottom line? Let’s get started!
Day 1: Identify Your Goals
The first day of your financial challenge is all about setting the tone for the week. Take a step back and identify your financial goals. Writing them out will serve as a visual reminder of why you’re doing the challenge in the first place and what you’re hoping to achieve. This will help maintain perspective and keep you motivated for the next several days and beyond.
To help organize your thoughts, include various categories such as immediate, short-term, and long-term goals. Don’t worry about timelines or details just yet. The purpose of this exercise is simply to establish a positive mindset.
Day 2: Request Your Credit Report
To get financially fit, it’s crucial to have an accurate picture of your financial situation. Hopefully you already have a general idea, but if you want to be successful, you’ll need to know precisely where you stand.
Requesting a copy of your credit report is the perfect place to start. Fortunately, this is a relatively straightforward process as the Fair Credit Reporting Act (FCRA) allows consumers to receive a FREE copy of their credit report once a year from each of the nationwide credit reporting companies—Equifax, Experian, and TransUnion.
Once you have your credit report in hand, review it closely. Your credit report will provide an in-depth overview of all of your current debts—including any unpaid debts that you may have either forgotten about or weren’t aware of, such as any outstanding medical bills or past utilities. Also, be sure to note any errors on your report and request to have them removed as they could be negatively affecting your credit rating.
Day 3: Evaluate Your Debt
Using your credit report along with your own records, list the balances you owe on each of your debts, including their interest rates and monthly payment amounts. This will help you to determine which debts you may want to tackle first or possibly consolidate.
For instance, if you have multiple credit cards with varying balances and interest rates, you may consider using a personal loan to consolidate those debts. Debt consolidation provides an opportunity to combine your multiple monthly payments into one affordable payment, often with a lower interest rate.
Day 4: Determine Your Budget
Now that you have an idea of which balances you need to tackle first, the next step is to review your budget and understand the financial resources you have for paying off debt.
- Start by calculating your total monthly net income. This will allow you to see how much money you currently have coming in.
- Next, compare your monthly income to your current expenses. Be sure to include all recurring costs such as housing, car payments, and utilities, along with any miscellaneous expenses such as shopping or entertainment costs.
Once you have a clear picture of your finances, you can better determine how much you’re capable of putting towards paying debt each month and subsequently set a realistic plan for paying it off.
Day 5: Reduce Your Spending
After evaluating your debt and budget, dedicate one day to figuring out how to trim excess spending and costs. Look for savings in these key areas:
- Home, auto, health, and other insurances
- Utility providers
- Cell phone
- Childcare and extracurricular activities
- Subscription services
- Club memberships
- Transportation and fuel
Also, consider where you spend your discretionary income. Could you cook more and order take out less? Stretch your salon visits from 6 weeks to 8 weeks apart? Get creative—you’ll quickly see the savings add up.
Day 6: Apply for a Personal Loan
Suppose you are making payments on multiple, high-interest credit card balances. In that case, consolidating your debt into a personal loan is a viable solution to better manage your debt and save money on interest.
But before deciding to apply just anywhere, take the time to explore available loan options from your local bank, credit unions, and reputable online lenders such as Credit Direct.
Be sure to inquire about the complete application process including specific loan requirements, potential lender rates and fees, and repayment schedules. Knowing these imperative details upfront will allow you to confidently choose the loan option that’s right for you.
With your homework complete, you’re officially ready to apply for a personal loan! To help ensure a seamless process, have all relevant documents on hand and within reach so that you can easily reference them if needed.
Day 7: Focus on the Future
Congratulations! You’ve reached the 7th and final day in your financial challenge! You should be proud—you’ve accomplished a lot this week. Not only did you dive into your financial situation and face your challenges head-on, but you made a proactive game plan for tackling them.
Now is the time to forgive yourself and move on from your past financial mistakes. Reflect on what you have learned over the past week and how you can continue to practice positive financial behaviors. Keep referring to the list of goals you created on Day 1 and start to plan for how you can achieve them now that you have debt under control.
If you are looking to consolidate debt and get financially fit, a personal loan from Credit Direct can help! Apply online to check offers in minutes with no effect to credit score.