Being in debt is pretty stressful. It can affect your personal and professional life. it may cause health problems to some. Thankfully, there are ways to get out of debt. Here are seven effective ways to eliminate debt:
1. Don’t Settle with Minimum Payments
While it may be tempting to pay just the minimum payments for a credit card, that may not be a good idea if you’re trying to get out of debt fast. If possible, pay more than the minimum payment. You won’t only save money on the interest but you get to also pay off your debt faster. It’s also advisable to use the snowball method. List all of your debts and pay off the ones with the smallest balances first. Take it one small debt at a time.
2. Negotiate for Lower Interest Rates
All it takes is one phone call to negotiate lower interest rates on your credit card. Let the bank know you’ve decided to aggressively pay for your debt and you need lower interest rates. Just make sure that you keep your promise. You can save over a thousand dollars if you are able to negotiate this.
3. Plan Your Strategy and Execute the Plan
The first thing you need to do is find out how much you actually owe. Then decide how you are going to pay all of it. You may have to set up automatic payments for this or schedule payments on your calendar to ensure you don’t miss them. Whatever the plan, make sure to execute them.
4. Get a Part-Time Work or a Side Hustle
You’ll have more funds to pay off debts when you can generate more income. How about monetizing those good skills? Or you could apply for a part-time work online. All you need is a computer and an internet connection. With the thousands of jobs available today, you’ll surely pick up something if you’re persistent and committed to land new work. If you’re good with arts and crafts, you can always sell at Etsy too.
5. Start Selling Stuff You Don’t Really Need
Decluttering will do you good. And getting rid of stuff you don’t need will give you extra cash. Why not sell them in your neighborhood by putting up a garage sale? You can also sell your stuff on eBay.
6. Consider Dropping Expensive Habits
Do you really need to get your coffee on Starbucks or go out every weekend? If you’re trying to get out of debt, you may start evaluating your spending habits and expenses. Imagine how much you can save when you decide to ditch old expensive habits and save your money instead. You can pay off debts faster!
7. Frugal Living
Frugal living doesn’t mean you should deprive yourself, it just means you’re prioritizing cheaper products and not spending money on fancy stuff. Here are a few ways to practice frugal living:
- Cut the Cable TV
- Stop buying expensive gifts during the holiday season. Consider getting a Mixbook picture Christmas cards instead
- Make your own food and stop going out to eat
- Don’t go grocery shopping when you’re hungry
- Learn how to say No
- Avoid expensive hobbies
- Let the family know you’re on a budget
- Create and stick to a budget
Make a commitment to pay off your debt. A good practice is to avoid temptations. If possible, use only two credit cards and always pay in cash.