Here are 5 great tips to get you started.
Being in debt can be a stressful experience. No matter what your circumstances are, whether you have signed a loan, got into a medical crisis, or shifting homes… debts are like an emergency. And like any emergency, the longer you wait, the worse it gets. Getting out of debt is something you can do yourself with the right tools and motivation.
Find out how much debt you have
First thing is first. You need to sit down and figure out exactly how much you owe on your debts. It might be a little scary to tally up, but it’s the first step in eliminating it. Compare how much is going out – all of your monthly bills and expenses – and how much is coming in – using the minimum payments on the debts, not the totals.
Decide what to pay first
Once you know exactly how much you owe, you’re ready to strategically target your debt. To do this, you need to prioritize which of your debts you’re going to pay off first – whether it’s your credit card, student loans or other debts. You’re going to want to pay off the loan with the highest interest rate first.
Eliminate temptation, cut costs
If you want to get out of debt fast, you have to stop using debt to fund your lifestyle. This means no more financing furniture, no more signing up for credit cards. This will help you focus solely on the debt that you currently have, so that you can develop a game plan to pay it off quickly.
Also, it makes sense to look at the small ways you’re spending money daily. That way, you can evaluate whether those purchases are worth it – and come up with ways to minimize them or get rid of them.
Negotiate on interest rates
If your credit card interest rates are high and it feels almost impossible to make headway on your balances, it’s worth calling your card issuer to negotiate. Believe it or not, asking for lower interest rates is actually quite a common thing. And if you have a good history of paying your bills on time, there’s a good possibility of getting a lower interest rate.
Decide on how you’re going to pay off the debt
Making more money usually generates significant numbers and if you’re in a lot of debt, working only one job is not an option. You need to have at least one additional income stream until you are out of the woods. Consider any skills you have, such as web design or coding, that you can offer to earn extra cash. Work over-time, take a part-time job or take a side hustle… a temporary job without a long-term commitment could be within reach.
No matter what that plan is, any one of these strategies can help you get out of debt faster. And the faster you become debt-free, the quicker you can start living the life you truly want.