No one likes being in debt. It’s stressful, it weighs you down, and it can be hard to see a way out. Often struggling individuals will turn to forms of debt relief, but there is light at the end of the tunnel.
With a little bit of effort and some smart planning, you can be debt free. Here are 7 strategies to help you get there:
Make a budget
If you’re drowning in debt, the first step to debt relief is to create a budget. You need to figure out where your money is going before you can make any adjustments. Track your spending for one month, then sit down and create a budget. Are you spending more than you bring in each month? If so, you’ll need to find ways to cut back. Look at your budget and see where you can cut corners. Maybe you can eat out less often or cancel your gym membership. Whatever it is, make sure your budget is realistic and that you are able to stick to it. Once you’ve created a budget, you can start working on paying off your debt.
Find extra money
If you want to get out of debt, you need to find extra money to put towards your debt repayments. One way to do this is to get a part-time job. Even if it’s just a few hours a week, the extra income can make a big difference. Another option is to sell some of your belongings that you no longer need or use. Have a garage sale, sell items online, or take them to a consignment shop. Any extra money you can bring in should be put towards your debt.
Make more than the minimum payment
If you’re only making the minimum payment on your debt, it’s going to take forever to pay it off. To get out of debt faster, you need to start making more than the minimum payment. Even a small amount a month can make a big difference. If you can’t afford to make more than the minimum payment, look at your budget and see where you can cut back so that you can put more towards your debt.
Attack your debt with a plan
There are two popular methods for paying off debt: the debt snowball and the debt avalanche. With the debt snowball, you make minimum payments on all of your debts except for the one with the smallest balance. Once that debt is paid off, you put all of the money you were paying towards it towards the debt with the next smallest balance. This method works well because you see progress quickly and it can be motivating to pay off smaller debts first.
With the debt avalanche, you make minimum payments on all of your debts except for the one with the highest interest rate. Once that debt is paid off, you put all of the money you were paying towards it towards the debt with the next highest interest rate. This method saves you money in the long run because you’re not paying as much in interest, but it can be difficult to stay motivated because it takes longer to see results.
Choose the debt repayment method that makes the most sense for you and stick with it.
Consolidate your debt
If you have multiple debts with different interest rates, it can be helpful to consolidate them into one loan with a lower interest rate. This will save you money in the long run because you’ll be paying less in interest. There are a few ways to consolidate debt, such as taking out a personal loan or using a balance transfer credit card. Talk to your bank or financial advisor to see what option is best for you.
Seek professional help
If you’re struggling to make ends meet and debt relief seems impossible, it may be time to seek professional help. There are a number of organizations that can help you get your finances back on track. They can provide you with debt counselling, budgeting advice, and more. Sometimes, all it takes is someone to help you see the light at the end of the tunnel.
Make debt relief a priority
If you want to get out of debt, you need to make it a priority. That means creating a budget and sticking to it, finding extra money to put towards debt repayments, and making more than the minimum payment. It may not be easy, but it’s important to stay focused on your goal. With a little bit of effort, you can make debt a thing of the past.
Debt can be a difficult thing to deal with, but it’s not impossible. If you’re willing to put in the work, you can make debt relief a reality. Just take it one step at a time and don’t give up. You can do this!
Feature image by Steve Buissinne