At times, all of us come across a situation in life, which requires us to loan some money to get by. It is no exaggeration to say that we are a nation that is in debt. Car loans, mortgage loans are the most usual, closely followed by education loans. We often run into debt, making certain investments in our present, to give us a sense of security and dignity in our futures.
A lot of people in the world struggle with debt, but unfortunate circumstances can strike you and take you off guard any day, and you might be in a position to not keep up with your monthly payments. So, it is often advised to get rid of your debt faster, so that the burden you possess each day is lesser. To take control of your lives in the best possible way it is important to get rid of debt faster and here are the smartest ways on how to get rid of your debt faster:
1. When you’re paying back, pay more than the minimum monthly payment
Make a payment that is more than the monthly minimum payment rate, to get rid of debt sooner. It will not only speed up the payoff process but will also reduce the amount you’ve to pay in interest, over the years. It is a benefit that aids you in two ways.
2. Build momentum by the debt snowball method
Speed up your pay off process even more by trying out the debt snowball method. Start with listing down all your debts, from largest to smallest, in a systematic manner. Do not leave out any debts you consider insignificant or trivial, make a complete chart. Whatever excess you save, start paying off the smaller amounts and get rid of them, so that eventually not only do you get freed up of little amounts piling up, but also you’ve more finances to focus on the larger loans, and interests, which you can then use to pay up sooner.
3. Take a part-time job or side hustle
If you live from one paycheck to the next, it can be quite difficult and challenging a task to pay off your debts. But, if you take up a freelancing part-time role, which can be online, to give you time and convenience, you can pay off your debts faster with the excess amount and get rid of the burden on your head sooner. Sites like Upwork and Freelancer have been around and you might find something suitable there, make some extra money, and be kicking. There are so many remote workers who work from home and make more than regular jobs.
4. Create a budget and live off essentials
Until you pay off your debts, stick to a strict financial budget. The first step is, of course, to create one, and the second is to not spend extravagantly. You should make the most out of living off essentials, and cut off added expenses as much as possible so that you’ve more money to pay off your debts. And, to keep you motivated through the process, remember a bare bones budget is only a temporary thing, and you’d feel better spending once your debts are paid off.
5. Sell things you don’t need
If you’ve stuff you don’t need, the best move might be to sell them. You can use the funds to pay down your debts sooner. All of us have stuff we hardly ever user, and we do not need, but can sell off to get extra cash. Utilizing online apps might be a good way to start getting rid of those unnecessary belongings that are taking up space, and being useless. Find a use, and get rid of your debts sooner.
6. Utilize bonuses and found money
All of us get some amount or the other, annually, in the form of found money. It can be anything from a promotional raise to a festivity bonus at work, to an annual tax refund that comes every spring. It can also be a family inheritance that you get from a distant relative or close one. Utilize these to pay off your debts rather than piling your debts up with interest rates going up every year. These unusual sources of income would help you in paying off bigger chunks of your debt, leaving you burden-free, every year. Get rid of bigger balances this way, and get rid of your faster and smarter.
7. To get rid of your debt, get rid of expensive habits
All of us love treating ourselves, and mostly, without realizing have pretty expensive habits of dining in fine restaurants or going to spas or bowling. It is important to get rid of these habits, but only temporarily, so that you can pay off your debts faster and quicker, and get burden free and back to enjoying all these privileges sooner.
8. Refinance that mortgage of yours
If your home belongs to you, you’ve enough equity to consolidate all other financial debts you have to a mortgage. However, repeatedly falling back upon your mortgage is not a great idea, so keep your spending below your income, and cut down on unnecessary spending and keep paying off a single mortgage with a single interest rather than multiple debts with multiple rates of interests that are always increasing.
9. Take advice from a credit counselor
Before we begin, let us tell you this is absolutely free, and does not cost you any extra money. A credit counselor can speak to you and analyze your financial situation, with your spending habits and earning opportunities, and make a detailed plan that would help you pay off your debt faster. Execution and implementation of that financial plan would, however, depend on you totally.
10. Become a household that uses one car
More than we would like to admit, our lifestyle often makes us spend way more than we realize. Use one car and you would spend less on gas, and maintenance, hence saving money to pay off your debts faster.