Most people have debt in one form or another. The problem is, while debt is easy to get into, it can be a tricky thing to get out of. The time between realizing that your debt is out of control and actually clearing it is full of hard work. No matter what sort of debt you’re in, it can take months, years, and sometimes even decades to get rid of it. There is no one-size-fits-all solution for erasing your financial problems, but tactics do exist which make paying off debt quicker and a lot less painful overall. With that in mind, here are ten surefire ways to get out of debt faster.
Pay More Each Month
There’s no financial law that says you should only make the minimum payment on your loans each month. You are allowed to pay more, and most people would advise that you do. By doing so, you speed up the payoff process, as well as save money on interest throughout the lives of those loans. However, you should check that you won’t be charged any prepayment penalties before you begin. You can do so by reading through your paperwork or by calling the lenders.
Live A Simpler Lifestyle
Some people struggle to pay the minimum on their loans, let alone any extra. If this sounds like your lifestyle, then you may want to rethink your budget. Take a look at your monthly expenses and eliminate as many of them as you can. Smaller costs, like takeaway coffees, meals out, and other treats may not do much damage to your finances in the short-term, but they do add up. By cutting out these unnecessary expenses, you free up a lot of extra money to use each month.
Ditch Those Bad Habits
We all have habits that we’re not too proud of. While some people binge on junk food or smoke cigarettes, others gamble and overspend. These habits are damaging to your body and mind, but they can harm your financial health too. After all, none of them are free or even cheap. You may not include these habits in your budget, but you should start to. Once you have, you can begin the process of quitting. This can be difficult, but there is lots of support out there for you.
Get A Side Hustle
Cutting costs is only ever going to get you so far. If you’re looking for ways to make higher payments on your loans, then you might need to start making more money too. Nearly everyone has skills or knowledge that they can monetize. You might be good with children, for example, or may be able to play the guitar. Whatever it is you can do, you could create a side hustle from it. Alternatively, you could take on another job at weekends or ask your current one for more hours.
Lower The Interest Rates
When you borrow money, you very rarely pay back the amount that was lent to you. More often than not, you owe a lot of interest on top. When this is the case for all of your loans, it can hugely increase your debt. Because of this, you may want to consolidate those debts with another loan. Having debt can make this difficult, so consider using a guarantor if you have bad credit. If you have a good history of paying bills on time, you may be able to ask for a lower interest rate too.
Use The Snowball Method
Tackling your biggest debts first makes a lot of sense in theory. After all, bigger debts take a while to pay back, which will only get longer the more interest is added. The trouble is, when you begin with the larger bills, you have to wait a while before any are cleared. This can be incredibly draining and might make you quit. For this reason, you should start with small bills instead. This is known as the snowball method and gives you the motivation that you need to keep going.
Work With Cash Windfalls
Most people find themselves with extra money at some point throughout the year. You might be given your inheritance, for example, or a bonus from work. Whatever sort of windfall you’re landed with, you should put it towards paying off your debts. As tempting as it can be to treat yourself to a new pair of shoes or TV, you have to try to resist. Although a splurge might offer some temporary satisfaction, overcoming your financial troubles will improve your life long-term.
Sell The Unwanted Stuff
None of our houses are as clean or tidy as we want them to be. If you’re planning a deep clean of your home, then you should take this as an opportunity to make a little extra cash. As you go around your house, make a pile of anything you no longer want or need. This could include anything from electronics to clothes, and even kitchen utensils. These items might be your trash, but they could be someone else’s treasure, so host a garage sale or list the items online.
Remember To Reward Yourself
Clearing debt definitely requires you to make a few lifestyle changes. However, that doesn’t mean that you should be living on the bare minimum each month. If you ban yourself from any sort of treat, it makes it a lot more likely that you’ll splash out at some point. This could put you even further into debt. Although there are certain things you should definitely cut from your budget, like unhealthy habits, you are allowed a few non-essentials if they make you happy.
Prevent Any Future Debt
It’s going to be difficult to get out of debt quickly if you keep piling it on. For this reason, you should take steps to prevent you from getting into any more debt in the future. Buying insurance and building an emergency fund means that you won’t have to borrow to cover unexpected expenses. While credit cards can certainly be useful in the right hands, if you have trouble stopping yourself from spending, then you may want to cut yours up.
Getting out of debt is never easy, but, with the advice above, you should be able to do it a little faster.