Best Tips on How to Get Out of Debt Faster
Being in a fix when it comes to paying off debt can be wrought with a lot of headache. Especially when you are trying as much as you can to get out of debt. Regardless of the type of debt you are in, it can take quite some time to pay the debt.
Luckily some strategies when perfectly implemented can help you in paying off your debt and make it less painful. The below tried and true steps will give an insight into how to get out of debt faster.
1: Pay more than the minimum payment.
When paying any debt its recommended that you pay more than the minimum monthly payment. This will help you clear your debt sooner, this applies to credit card debts, personal loans, or student loans. Apart from speeding up the paying process it will also reduce the amount of loan interest accrued from the loan. Though it’s always good to double check that your loan doesn’t charge any penalties for prepayment.
2: Try the debt snowball method.
When implementing step 1, it will be great if you think about using the debt snowball method, in order to speed the process of paying the debt and building momentum. List all your debts from smallest to largest. Then put all your excess funds to the smallest balance. While you do this do make minimum payments to the largest loans. Once you are done with paying the smaller loan then you can put the extra money into paying for the next small loan. Do this until you have paid off all your debts. Within no time you will have finished paying off all your small loans and have enough cash to put into paying your larger loans. The objective is to snowball all of the extra dollars you have to your debts until all the debts are paid.
3: Pick up a side hustle.
The next step is to increase your income source or sources. A little extra dollar will amply your efforts in paying off your debts. Clearly you must have a talent or skill that you can monetize and earn some money from it. Don’t be shy about any skill be it babysitting or law mowing all can get you a few extra dollars. You can check on sites Upwork or Taskrabbit and you will get many easy money earning gigs. The idea behind all this is to get the extra money and use it clearing your debts. You can also check out 50 Side Business You Can Start on Your Own.
4: Create (and live with) a bare-bones budget.
Paying debts faster means also cutting down expenses so that you can increase your pool of extra cash. This means coming up with a budget that you will have to stick with. The best tool to use is creating a bare-bones budget, this strategy will cut down your expenses as low as they can get and for as long as they can. A barebones budget is different when it comes to everyone, but the most important thing is that it should be devoid of any extras. This will help you to pay considerably more towards your debt. The budget is meant is supposed to be temporary, once you are done with your debts then maybe you can add discretion spending back into your monthly or weekly budget.
5: Sell everything you don’t need.
Selling some of the stuff you don’t use is another way of getting extra money to pay your debts. Stocking off one’s belongings help to get rid of all that stuff that is just lying around unused in the house or stores. If you live in a neighborhood that permits an old style garage door sale, then embrace this cheap and easy of getting rid of unwanted belongings and be able to earn some profit from it. If not the second option would be to consider selling the stuff using the various online platforms that are available.
6: Get a seasonal, part-time job.
You can get a seasonal or a part time job, especially during the holiday seasons coming up. You will find plenty of opportunities from local retailers who are always on the lookout for flexible seasonal workers. So during the holidays get a seasonal job in order to get the extra cash to use in paying off your debt. This does not apply only during holidays, there are many opportunities with regards to part-time jobs. Regardless of the season, (winter, spring, summer or autumn). This means regardless of the season you will definitely find a temporary job that doesn’t need long term commitment.
7: Ask for lower interest rates on your credit cards — and negotiate other bills.
Negotiate the credit card interests, ask if you can get lower interest cards. This is very important when you have very high interest rates on your credit cards hence making it hard to balance your expenses. This will only apply if you have an impressive history of paying your bills, but otherwise it might be a little difficult. Apart from credit cards, you can also negotiate other types of bills in your expenditure list. The less you pay for your fixed expenses the more money you can put into paying off your debts.
8: Consider a balance transfer.
If your credit card company doesn’t offer lower interest rates on credit card, then you can opt for balance transfers. There are so many balance transfers offer in the market, you can be able to even secure 0% introductory APR and purchase for the first 15 months, but then you should be able to pay the balance transfer fee an approximate of 3% of the privilege amount. If you have a credit card balance you could feasibly pay off during that time frame, transferring the balance to a 0% introductory APR card like this one could save you money on interest while simultaneously helping you pay down debt faster
9: Use ‘found money’ to pay off balances.
Found money can be useful in paying off debts, annual rise, inheritance or bonus at work these are examples of found money and they can be handy when it comes to paying off debts. Regardless of the type of found money, also it would help in paying small debts if you are using the snowball method, you can use the money to clear off the small debts first. But then if you have only large debts you can take a chunk of the found money and use it to pay off a portion of the large debts.
10: Drop expensive habits.
It’s always important to give a detailed look into how you spend money daily. Give a careful look into your spending habits, then you will be able to determine whether the purchases are worth it or not, so that you can be able to get rid of them. This trick is also important when coming up with a barebones budget. The best trick is to cut down the expenses with the objective of getting rid of spending behaviors or replacing them with something less expensive.
11: Step away from temptation
Step away from any temptation of using money to unplanned for expenses. Avoid the local mall or four favorite online store, or that favorite restaurant you like dining out to. Well others can be as interesting as fighting the temptation of having your credit card with you. Whatever your biggest temptation is, it’s best to avoid it altogether when you’re paying down debt. Each time you are constantly tempted it makes it hard for you to focus in paying your debts. If you have to then stash those credit cards away, then get them back when you are debt free.
The Bottom Line
The best thing is to accept the reality and start working hard in making sure that you are working extra hard to pay your debts. It’s very exhausting working with the monthly payments and the paycheck to paycheck lifestyle. Regardless of the debt, (credit, debit, students loan debt, car loan). There’s always a way out, it may not happen within a few hours but the it will help you to achieve a debt free future. And also you be able to stick with it in the long run. No matter what that plan is, any one of these strategies can help you pay off debt faster. And the faster you become debt-free, the quicker you can start living the life you truly want.