6 Tips to Get Out of Debt FasterJuly 29, 2013
Holding too much debt can negatively impact your credit and create many potential issues for your future; therefore paying down your debt should always be a top priority. While this is easily agreed upon, actually doing so is the difficult part; taken one step at a time though, paying off your debt actually feels really good. If you want to see your debt dramatically decrease try these 6 tips to get out of debt quick!
1. Pay Bills Often
Sure in most instances bills are only due once a month, but by paying off your bills more often than they are due you will find your debt diminishing more rapidly. Plus, by paying more frequently you can make smaller payments that you will hardly notice leaving your bank account. Try setting up a program like Auto Pay to pay your bills at regular scheduled intervals, either once a week or every other day, the exact details are up to you; set the reoccurring payments for a dollar amount you can easily afford, even $5 or $10 deposited regularly adds up. Pair this new routine to what you normally would pay each month and your practically unnoticed efforts will really start to pay off.
2. Combine Debts & Avoid Interest Rates
Having 10 different credit cards gets complicated, especially when you are only paying the minimum payments every month. This is how people get trapped in debt for eternity; minimum payments are mostly just interest, leaving nearly the same balance each month. In other words it could literally take 20 years to pay off a $1,500 debt, which any bank desires since that’s how they make a good deal of money. By combining your debts (namely credit cards) wherever possible you will be able to pay off larger balances at one time, and perhaps even avoid high interest charges. Assess which cards have the highest interest rates applied; these are the cards you want to transfer balances off first, perhaps you can swap the balance onto a lower interest card you already have, or you can apply for a new card—many offer 0% interest for the first year.
3. Still Spending?
While struggling to get out of debt, it’s not uncommon that we are only making more of it. In order to get rid of debt, you have to stop creating it. Shredding credit cards is one way to avoid your beloved plastic, creating strict budgets is yet another. You can apply every trick on the list to get rid of your debt, but if you continue to spend more than you can pay off every month, you are only asking for an endless wave of bills.
4. Use Rewards For Motivation
No matter how old we get, we still remain more likely to successfully accomplish a task if we know a reward follows. In that case, whatever it is that you’ve been wanting, tell yourself that you can have it once you pay off your debts (not including your mortgage). Once you have no cards to pay off you will find extra money swimming around in your account anyway, making for the perfect excuse to buy something you deserve: with cash of course!
5. Don’t Need It? Sell It!
Anything that is cluttering up your home, and likely old credit card statements, is an item that can be turned into cash. This cash can then be used to pay off debts while your house gets cleaned of excess clutter. Online platforms like Amazon and Ebay allow people to easily connect and sell their goods, while garage sales and that friend-of-a-friend looking for the saw you have gathering dust in the garage, are other options.
6. Write Down Everything You Buy
Debt often occurs because we spend more money than we bring in; if you think you only buy the basics but still find yourself in debt, it’s time to start recording your spending habits—and I mean every last purchase! When you look back over your monthly purchases, all neat and orderly, it becomes clear where money is senselessly wasted, or could perhaps be saved. By getting your spending in check you are only ensuring your debts will soon be paid off.