Want to Pay off Debt Fast? Here’s an Easy Way!
8 Proven Ways to Pay off Debt Fast
Debts put a ceiling on what you can achieve in your financial life. From a small credit card balance to several huge financial commitments, debts put a limit to how fast you can go regardless of how small or how big it is.
It may seem quite difficult to pay off debt, but ultimately, all you need is some dedication, determination, and persistence. We have put together 8 vital tips to help you pay off debt fast.
1. Stop Using Your Credit Card
You need to totally eliminate credit cards out of the list of your payment options if you want to get out of debt. The more payments you make with that card, the higher the balance, and the more indebted you become. If you want to pay off debt fast, then you need to stop living with the mentality that you’re readily offered cash up front, so you should take it. This was explained in “The 10 Most Common Credit Sins and Mistakes.”
What most people are unaware of is that cash withdrawals and cash advances from credit cards are a lot higher as compared to debit cards. This is the same for interest rates. Additionally, the interest charges on credit cards begin to accumulate on the same day you take the loan.
Given, this is a tough decision to make and stay with. But it is one you should consider. Try keeping your card far away from your wallet or bag, that way, the urge to spend would have gone away when you see the card again.
2. Pay as Much as You Can Afford Each Month
Monthly Payments: As a person, it is very important to have funds set aside for emergency purposes and eventualities. However, once you’re able to get this done, the next goal should be to clear off as much debt as you can. The more debts you can settle, the lesser you will have to settle. And once you’re able to pay off debt fast, you will feel more relaxed and free.
Little payments with funds you saved at a grocery store with coupons can go a long way. Also, if you did extra hours last week, use the proceeds to pay off your debt. In summary, all extra earnings should be used in paying off debt.
3. Cutback on Your Spending
Spending Cuts: Do an assessment of how and what you spend your money on, then try to divide these things into needs and wants. Stop going to that coffee shop or your favorite lunch spot every day. After some time, you’ll realize how much you have saved from controlling how much you spend on mere wants. Now, use this cash to pay off your debt.
If you’re finding it difficult to decide which expenses you want to cut out, drawing up a budget can be a good start. Software like You Need a Budget can help you prioritize your spending.
4. Double up on Payments
Clearing the debt on one credit card is a great start, however, it is not the end of your journey. Remember that your goal is to be totally free of debt. If you stay committed to the cause, and keep things going, paying off as little or as much debt at a time, you will be able to pay off debt fast.
5. Use Windfalls to Pay Down Balances
It can be very tempting and instinctive to spend windfalls like tax returns and work bonuses. You should still be prudent while spending these. We advise that you take out some part of balance transfers to pay off debt.
6. Freelance to Earn Extra Money
As it is often said, there’s no such thing as too much money, so a few more dollars on the side won’t hurt. It is also possible that you earn a considerable amount of money from freelancing. After you earn, be sure to put it back into paying your debt. This will be a good way to help to generate passive income as you increase revenue streams
Lacking ideas on how to get on with freelancing? Check out “19 Unusual Ways to Earn Extra Cash.”
7. Start With Debts That Have the Highest Interest Rates
While some people would like to build some confidence and learn dedication by using the debt snowball method, which suggests that you pay off debts with the smallest interests. But in the actual sense, it is better to pay off debts with huge interest rates. By doing this, you’re able to pay off debt faster and move on financially.
8. Don’t Sacrifice the Things You Love the Most
You may need to cut back from a lot of expenses, but you’re trying to get debt free, not become depressed. It would be difficult to adopt a totally different lifestyle, so you need to take it slowly till you become comfortable with spending less and saving more.
Debt does not only affect your financial life, it affects almost every other aspect of your life and lifestyle. Paying off debt fast can be a big issue if you go about it the wrong way. And regardless of it’s a student loan, card debts, car loan, debt weighs you down both financially and mentally.
According to an online survey by NerdWallet, more than half of Americans have been in credit card debt. This means that more than half the population earn money just to lose it again to credit card companies.
You too can be debt free! The first step is to try and pay off existing debt. Debt can put you in a bad place mentally, physically and emotionally. And if you’re still in debt, changing a few spending habits will get you on course; keep a very low balance on your credit card, reduce how much you spend on frivolities, clear off as much debt as you can at a time, and learn to pay off high-interest debts first.
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