For many of us, being debt-free is a dream come true. Let’s all agree that debt sucks! There is no getting around that. For the majority of the American population, debt leads to relationship problems, stress, poor job performance, can’t sleep at night, worrying during the day… and the list could go on and on.
For most Americans, we have a love/hate relationship with debt. We love to use it and hate to carry it. If you are serious about becoming debt-free so that you can live a comfortable life and leave a legacy, this posting is for you! Paying off debt takes a lot of hard work. It won’t be easy for you, but I can promise you it’ll be worth it. When I paid off over 60K in 8 years here are some tips that I used.
Pay More than the Minimum Payment.
Whether you’re carrying credit card debt, personal loans, or student loans, one of the best ways to pay them down sooner is to make more than the minimum monthly payment. Doing so will not only help you save on interest throughout the life of your loan, but it will also speed up the payoff process. Make sure your loan doesn’t charge any prepayment penalties before you get started.
Debt Snowball Method
Throw everything you have at the debt with the lowest balance. Keep paying the minimum monthly payment on everything else. Then, after you pay that one off, use the money you were using to pay off the first debt and combine, or snowball, that money in with the payment of the next lowest debt. Essentially, you are paying the exact same amount out of the pocket month to month until you pay off your debt.
Side Hustle/ Part-Time Job
Attacking your debts with the debt snowball method will speed up the process, but earning more money can amplify your efforts even further. Do you have a hobby that you really enjoy? Maybe you are really good at handyman services. Perhaps you have a talent for music or dancing. You could do something as simple as picking up a job serving at a restaurant on the weekends. If you’re handy with a camera you could shoot weddings on the weekends.
Chances are you have some extra things around the house that you may not want or need anymore. A great way to bring in some extra cash to pay off debt fast is to sell those items.
Try going through the items you hardly use, sell them at a garage sale or on eBay, Amazon, or Facebook and then use that money to knock off debt. It’s that simple.
Ask for Lower Rates
If your credit card interest rates are so high it feels almost impossible to make headway on your balances, it’s worth calling your card issuer to negotiate. Believe it or not, asking for lower interest rates is actually quite normal. And if you have a solid history of paying your bills on time, there’s a good possibility of getting a lower interest rate.
Use Leftover Budget Money
This one is simple enough. If you are budgeting $100 a month for something and that bill ends up being $75, then put that $25 toward your debt.
Develop a Spending Plan
Without a clear budget, it’s easy to lose sight of your goal and overspend. Take time to track spending and develop a budget you can stick to for the long haul.