There’s probably a reason why ‘debt’ and ‘death’ sound alike. Whether it’s a credit card loan, personal loan, car payment or any type of debt, it’s costing you money! Having an unpaid debt can keep you up at night and may cause you undue stress as well. But, not to worry because paying off a debt can often be easier than you think! The key is persistence and knowing how to tackle what seems like an insurmountable amount. After all, becoming debt-free is the best and only way to take control of your life and your future. We’ve rounded up ways on how you can tackle your debts as quickly as possible:
1) LIST DEBTS BY INTEREST RATE
Take out all of your bills and list your debts from smallest to largest. Then, list them in order from highest interest rate to the smallest interest rate. Since the one with the highest interest rate is costing you the most money, that’s the one you want to pay off first. Once you have the totals listed out, and the interest rate on each, you’ll know exactly what you’re up against before you start to tackle the highest interest rate debt.
2) ALWAYS MAKE MINIMUM MONTHLY PAYMENTS
You’ll want to be sure to always pay your minimum payments on time for every debt you have — in order to avoid paying higher interest and late fees. So if you’re trying to pay off the highest interest rate card first, put more money toward that card each month, while continuing to make the minimum payments on all other debts. Then move to the next highest interest rate card and so on.
3) CUT DOWN ON YOUR EXPENSES
If you really want to pay down debt faster, you’ll need to cut your expenses as much as you can. One tool you can create and use is a bare-bones budget. With this strategy, you’ll cut your expenses as low as they can go and live on as little as possible for as long as you can.
4) SELL ANY UNNECESSARY ITEMS
Take a look around your house. Is there anything taking up space that you really don’t need? Maybe there are some larger items taking up space such as unnecessary furniture that could be sold to pay off your debts and decrease your financial burden. You could host a garage sale, or sell items on an online yard sale, Facebook groups, and other sites.
5) EARN EXTRA CASH
Nearly everyone has a talent or skill they can monetize, whether it’s babysitting, cleaning houses, or becoming a virtual assistant. With sites like Onlinejobs.ph and Upwork.com, nearly anyone can find some way to earn extra money on the side. The key is taking any extra money you earn and using it to pay off loans right away.
6) STAY OUT OF EXPENSIVE HABITS
If you’re in debt and consistently coming up short each month, evaluating your habits might be the best idea yet. No matter what, 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.
TO SUM IT ALL UP
No matter what type of debt you’re in — whether it’s credit card debt, personal loans, car loans, or something else — it’s important to know there is a way out. It may not happen overnight, but a debt-free future could be yours if you create a plan — and stick with it long enough.