If you have a huge amount of debt, then you must have known that familiar feeling of being tied. Having debt is very limiting. You are never going to live your life to the fullest if you carry a huge amount of debt.
The good part is that you are not alone. It was predicted that an average American carries $7,000 in credit card and more than $25,000 in non-mortgage debt. Not to mention that you will have the student loans that you will have to pay.
That is a huge amount of debt. The good news is, you don’t need to worry about dealing with debt collector, even with a flick of your finger. All you need is consistency.
Below are the ways you can get out of your debt fast:
- Stop using a credit card
This is perhaps the first thing that you should do once you realize that you have had an overwhelmingly huge amount of debt. You should stop using your credit card until you have paid off all of your debt.
We know that it is very to use your credit card for any purchase transaction. However, because of that reason as well that perhaps instead of being able to pay off your loans, you are only adding more loans to your debit card.
If for some reason you still need to use your credit card, then you have to be very strict with yourself. Ensure that all the purchases that you made with that credit card are budgeted. At the end of the month, this means that you will be able to pay it off.
Another alternative to that is you can choose the credit card that gives you the best deal. This means more advantages that you can take at a later date or even lower credit rate. You can use that card and freeze all of the others.
However, if you think that you do not have that amount of will power – it is very difficult, then you can always freeze your card.
- Pay more than the minimum amount
We know that you are squeezing your budget very tight. However, you need to pay off more than your limited amount. This way, you will actually be able to see the progress of your paying it off.
By paying more than your minimum, you are also ensuring that you are going to be charged will less amount of interest each month.
If you have never maintained a budget in your life, then this is a good way to start. The reason why you should start budgeting is that you are going to be able to gain more control over your expenses. The most important part of budgeting is to keep track of your expenses as well. If you do both diligently, then you will be able to see the whole picture of your financial status. You will be able to see what kind of expenses that you make each month, and whether that amount of expenses is necessary.
By budgeting, you will also be able to make smarter financial decisions. You will be able to see type of expenses that you can cut down or eliminate. You may be going to the nearest cafe for a sip of coffee more often than you intended, or you have not realized that you have been paying off a gym membership that you have never gone to. This will enable you to cut unnecessary expenses out!
There are a lot of companies that have a bonus scheme for their employees. This means that they would give their employees a certain amount of bonus. Most of us would tend to splurge that bonuses. Don’t! Instead of spending it on something that is not necessary, you can use it to pay off your debt.
This is also applicable to all of your other excess money or income that is not budgeted. Maybe you are due for your tax income next month. Now you better think twice on how to use that additional income money.
- Side hustle
If you have not had a side hustle, then you should try to get one. This only means that you are able to manage your time well. A side hustle is also a commitment. You need to commit some amount of your time to be able to do so. If you have already been working two jobs, then what you should focus on is getting a passive income.
A passive income can be described as a form of income that will not require you to spend some amount of your time. This could come in a variety of forms. Maybe you have a spare room in your house that you can rent out. That rent income is a passive income. Because you are not giving up any of your time to earn that amount of money.
- Debt payment method
There are a lot of debt payment methods that you can use to pay off your debt. There are some experts that suggest you pay your bill off starting from the one with the highest amount of interest. In this way, you will be able to save your money in terms of overall payment.
However, this method might not be suitable for everyone because it takes quite a while for you to feel the impact. If you are someone that needs to feel a small amount of winning, then you can choose the snowball method.
The snowball method basically suggests you pay off your debt from the smallest amount. This way, you will be able to feel that you have done at least a small amount of improvement.