Debt is such an ugly word. Almost every person has some (or at least has some point in their lives). It’s not always a bad thing to have some debt, but most people would prefer to be debt free (wouldn’t we all??). When you’re living paycheck to paycheck, it can fee like you’ll never get out of debt, no matter how hard you try. While there’s no one way to do it, here are some steps that you can take to help reduce, and eventually pay off, your debt.
Is Amazon shopping part of life for you? Make sure you’re doing all you can to save while you’re shopping with these Amazon shopping tips!
Get a Plan to Get Out of Debt
Step one needs to be getting a plan together. There’s no “right” way to do any of this. Grab a notebook or get a budget planner from Amazon to help you get organized. You’re going to have to be really honest with yourself about your debt and income. Get a list of your debt, the total amount due, pay off date, monthly payment amount, and payment due date. This list will come in handy as you’re coming up with a plan. Once you have your current budget written out, really take a look at what you’re spending and see where you can start making cuts. Think about ways to bring in additional income. You might have to make a few sacrifices to pay this debt off depending on your income and goals.
Stop Taking On More Debt
Ok this one seems totally simple. Just stop buying things. Cut up your credit cards and stop shopping. Yes some of us get into debt that way (retail therapy is a real thing y’all), but that’s not the only reason or cause. Many times we take on more debt because of student loans, medical bills, or other unexpected situations. Whenever possible, don’t add to your existing debt.
Make Payments On Time
It’s also important to keep paying your bills on time each month. This way you avoid any late fees and the possibility of your interest rate going up. When you’re trying to get out of debt, payments can be a huge piece to this puzzle. Scheduling those payments to come out of your account automatically can help ensure you don’t miss them. When the money comes right out of my account, it’s harder to “miss” it or spend it on something else.
Pay More than the Minimum
While it’s great that you’re paying your bills on time each month, paying only the minimum amount will have you pay more in interest by the time you’re done. One tip to help you get out of debt faster is to pay as much each month as you possibly can. Find areas where you can cut back in your life if you have to in order to pay a little extra. When you’re making these additional payments, be sure they’re going to your principal and not just the interest whenever possible. Making “double” payments can also help you pay things off more quickly. By making payments twice a month, it can help bring down those balances even faster. So if you can’t pay it all in one payment each month, pay what you can, when you can.
Tackle Higher Interests and Smaller Debts
There are a couple of schools of thought here: either start with the biggest balance debt or the one with the highest interest rate. You need to decide which one makes most sense for you. By picking the balance with the highest interest rate, if you can pay down the principal more quickly, in the end you’ll be paying less interest which will save you money. If you’d rather start with the biggest balance, that works too. The most important thing when working to get out of debt is to find a plan that works for you and stick to it!
Throw More Money at the Next Debt
Once you’ve paid off your first debt, roll those payments into another debt. Once you’ve knocked out some debt, you’ll see the progress you’ve made. This will help encourage you to keep paying off the rest of your debt. Think of it as investing in yourself. Sure there are other things you might be able to do with those payments for the debt you’ve paid off, but now you know how good it feels to get things paid off. Keep going! Make sure to take a minute to celebrate your wins too! You’ve worked hard to pay those debts off. Your hard work deserves to be acknowledged.
Get an Emergency Fund Started
Don’t you love how emergencies can wipe away your savings or have you turning to your credit card? Decide to have an emergency fund already set aside to stay ahead of the problem. Set a goal of saving $1,000 for an emergency fund. Once you’ve reached that goal, work on saving enough to cover 3 to 6 months of your expenses. That way, if you are out of work for an extended amount of time, you’ll be able to survive without going into debt.
Do you own anything of value that you’re willing to part ways with? Or maybe you are willing to sell everything that you have (minus your children of course) to get pay off your debt. You might be surprised how selling your assets could help things turn around. There are a lot of different ways you can sell without having to leave your home. An old school yard or garage sale is a great way to get rid of a lot of smaller things. For larger things, consider Facebook Marketplace, eBay, or sites like Mercari or Poshmark if you’ve got name brand or higher end items. Just be sure you’re putting the funds from your sale towards getting out of debt.
These are a few simple steps that you can take that will help you get out of debt faster. What other ways have you discovered while trying to get out of debt quickly?