Are you feeling stressed about your current amount of debt?
Whether you have debt from a student loan, car loans, house payments or an unpaid credit card, debt can feel exceptionally overwhelming.
While most people try to hide their debts, it’s important to note that it’s a normal part of life. In fact, the average American household has over $155,000 in cumulative debt.
As much as we try to avoid debt, it’s not always possible. However, debt doesn’t have to be such a large stress factor in your everyday life. In fact, there are simple steps anybody can take to minimize their debts.
If you’re feeling uneasy about the current amount of debt under your belt, you’re going to want to read this.
We’ve put together ten foolproof steps one can take to get out of debt fast and gain financial freedom.
1. Pay Greater Than the Minimum Payment
When it comes time to pay off your credit card debt, strive to pay more than the minimum amount each month.
While it may be tempting to offer the bare minimum, it’s only hurting you in the long run. This isn’t to say this needs to be a rule each month, but when the money is available, do your best to pay beyond the minimum.
Doing this will help pay off the loan faster and also save on interest throughout the term of the loan.
Trust us, your future self is going to thank you for this.
2. Pay in Chunks
Did you just receive a large balance of money?
Perhaps you got a bonus at work or you’re even cashing in on a percentage of your inheritance. Regardless, make the responsible decision to be financially savvy and use this money wisely.
Remember, a new car or toy can wait and is only going to cost you more money to maintain.
Lay your debt in front of you and consider which debt is going to most benefit from a large payment. In simple terms, it might be best to pay off your debt that carries the highest interest rates.
3. Create a Minimalist Budget
When you’re head over heels in debt, your monthly budget needs to be bare bones and simple.
Unfortunately, the concept of treating yourself does not currently apply to your life. Instead, be realistic with yourself about what needs to be spent in each area of your life.
Download an app that helps keep track of your monthly budget and outlines how much money you have left to spend in each category.
4. Consider Debt Consolidation
In general, debt consolidation allows people to refinance their debts. It often entails the process of taking out a large loan to help pay off other loans.
For most, it’s a convenient, safe and less expensive way to ensure debts are paid off. It also helps to avoid excessively damaging your credit score or risking your luck with credit agencies.
While one of the most common reasons that people consolidate their debts is for lower interest rates, there are many more advantages. Get more info on debt consolidation here!
5. Pick up a Side Hustle
If you’re looking to gain extra money, why not pick up a side gig in addition to your 9-5?
With the help of the internet, the online possibilities for making money are essentially endless.
A simple Google search is guaranteed to result in thousands of options. To start, consider freelance writing, product reviews, online surveys and ghostwriting. These opportunities allow for the possibility of earning extra money on a daily basis.
Websites such as Fiverr also present fabulous opportunities for a side hustle. This website gives everyday people the platform for sharing their skills and making money.
6. Minimize Unnecessary Monthly Payments
You know that pricey gym membership fee that presents itself each month on your bank statement? Or, what about the monthly gift subscription that you treated yourself to for your birthday last year?
One of the most useful and effective tools for minimizing your debt is to only make monthly payments that are 100% necessary to your life. Unfortunately, this would not include gym memberships, monthly donations, magazine subscriptions, etc.
Do yourself a necessary favor and rid yourself of these monthly payments. Instead, work out at home and develop a healthy running schedule. Get a Library card and make use of all the free magazines always on hand.
For most people, this is guaranteed to save at least $100 each and every month.
7. Operate a Monthly “Fiscal Fast”
If you’re not familiar with the concept of a “fiscal fast”, you’re going to want to become so right now.
A fiscal fast involves a period of one week each month in which households solely use what they already have to get through the week. This means using up all of the ingredients currently in the fridge, freezer, cupboard, and pantry without purchasing anything additionally.
Sure, the concept may seem intimidating at first, but you’ll be surprised at how many meal options are awaiting with on-hand ingredients. Anything from a soup to a chili and stir-fries are always simple and very possible options.
You won’t believe the money saved this week! Use this money to pay off a credit card and minimize your debt load. A little goes a long way!
8. Reduce Costly Habits
In most cases, our bad habits are detrimental to our health, well-being and our wallets.
Let’s consider some of the most common bad habits: Cigarettes, drugs, online shopping, gambling, and alcohol.
What do all of these habits have in common? They’re expensive.
There’s no denying the financial burden that buying three packs of cigarettes on a weekly basis does to our wallets. If the thought of quitting is too unrealistic, at least minimize your intake and work this reduction into your budget.
9. Leave Your Bank Cards at Home
When we look over our bank statements, it’s always shocking to see where we spend our money. More often than not, it’s the little things that really add up: take-out lunches, a post-work happy hour drink and our morning Starbucks.
Avoid temptation where you can. For most, this could even be as simple as leaving bank cards at home whilst at work. Create a weekly “at work” budget and take this money out in cash at the beginning of the week.
This keeps your bank account in check and ensures that you are not overspending throughout the workday. You’ll also find this leads to more healthy choices!
10. Use a Financial Advisor
If all else fails, contact a financial advisor.
These professionals and here to help us manage our money and get us out of sticky situations. They will be able to encourage better spending habits, create a plan and schedule debt payments that work for you.
Are You Ready to Get Out of Debt Fast?
There’s no denying that debt is one of the most stressful aspects in life. With the growing cost of education, housing, and everyday life, it’s almost impossible to avoid accumulating at least some debt.
With this debt often comes stress and anxiety. In fact, 56% of Americans reported that their current debt is negatively impacting their everyday lives.
While debt is a normal part of adulthood, it doesn’t have to be something that plagues your everyday life.
Fortunately, there are things each and every person in debt can do to get out of debt fast. If you’re looking to minimize your debt and maximize your well-being, why not give these suggestions a try. We can assure you that you will not regret it!
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