it’s kind of easy to continue living in debt if you don’t have to face the reality of your situation, but people would love to degrade their debts or completely get rid of them, they aren’t quite sure of how it can be possible or how they can get started, unfortunately no matter what kind of debt you’re in, it may take several years or even decades to get it paid all of.
Fortunately, there are couple of ways or strategies that can be used to make the task easier —and a whole lot less painful. Consider these tried-and-used methods if you’re ready to get out of debt.
Table of contents
1- Pay more than the minimum
Make sure that the credit card, overdraft or credit limit you pay is always higher than the minimum repayment amount. If you only pay the minimum credit card payment each month, it may actually take a very long time to pay off your balance. That’s because most of your minimum payment will be used to cover interest expenses, rather than reducing the amount you actually owe.
If you want to quickly pay your debt, you should pay as much as extra you can afford, even 50 extra dollars each month will help. It’s highly recommended to use a financial calculator to visualize how much you saved like this.
2- Spend less than you plan to spend
The wishes and desires of most of us are greater than our salary. You may have heard an old saying: “You can have almost anything you want; you just can’t afford everything you want” Many people are in debt because they tend to buy what they want, when they want, even though millionaires sometimes can’t afford to buy everything they would want.
If you want something, don’t buy it unless you have double the cost of it, if you can be satisfied with less than you normally need, even temporarily, you can use the you saved to pay down your dept.
3- Pay cash instead of credit card
According to McDonalds, customers that pay with cards spend 56% more at its restaurants. Studies have shown that people spend 100% more on vending machines or event tickets when they use credit card rather than cash.
If we apply this concept to an ordinary household who currently use credit cards to buy everything and collect points or to get cash, if they only buy things with cash, they may save more than $3,000 per year (points or cash back is only the maximum value of $400).
Even if your savings are not as much as in this example, you may understand our point of view. If you want to get rid of debt, leave your credit card at home, use cash, and don’t buy things with credit until you have paid back the debt to the level you’re working towards.
4- Pay of your most expensive debt first
One of the smartest strategies to get rid of debt is to make minimum repayments for all debts and credit cards except one. Choose a debt that interests you the most and focus all additional payments on paying off this debt first.
Once your first most expensive debt is paid off, you can take all the money you paid for the first debt and focus it on the second most expensive debt. When you pay off all the debts, continue to use this method, and finally you will pay off the least expensive debts left.
This strategy will get you out of your debt burden quickly, and you will feel encouraged when you see the progress. There is a different variant of this strategy, and many people find it even more motivating, it is Called the “snowball method“
5- Save on groceries to help pay off debt faster
To save some money to pay off your debts faster, try to stock your groceries when they are on sell, or shop further and stock them, then skip a grocery store every month and make a living from the stored food.
You can store non-perishable foods such as canned foods, cereals, and frozen foods such as bread and meat. Filling up your cabinets at grocery sales and then skipping a grocery store each month can save you up to 25% of your annual grocery bill.
A family of four might save between $2,300 and $2,900 per year by doing this. In the long run, using these savings for debt will definitely put you ahead.
The key to this strategy is to observe the discounts, only stocking up when groceries are on sale. When you “skip” the grocery store, you will still need to buy perishable foods, such as milk, fruits, and vegetables, but hopefully you can skip other products that you usually buy. If you can’t skip the store every month, try it every other month. This can save you aa important amount of money. You can also use your indulgence to save more on groceries.
6- Get a second job to pay down your debts aggressively
Getting a second job, or taking one or two extra shifts is a common way for many people to pay off their debts. This does not apply to everyone, but if you can, do it, you can illuminate the debt in just few years.
To do this, you must use all the extra income to pay off debts. The additional shifts or working hours do not need to be permanent. Once your debt is paid off, you can consider getting back to normal.
You can also consider generating some extra income to pay down your debt by taking advantage of a skill you have or a hubby that can provide you with an income. For example, if you happen to be a good writer, consider signinup to Fiverr and start writing articles for others in exchange for some money. If you have some entrepreneurship skills or you are passionate about marketing, you can opt for opening an online store
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