Total U.S consumer debt is nearly 4 trillion dollars and is showing no signs of decreasing! If part of this monstrosity has your name on it, then you need to get rid of it fast!
If not, it could very well end up crippling your financial future.
This article will show you several ways to turbocharge your way out of debt and into freedom!
But make no mistake, paying off your debt with the quickness will be a hard job.
Everyone wants to do it, but not everybody is ready to start the process because it requires discipline, consistency, and sacrifice.
On the other hand, the consequences of not paying it off can be catastrophic on every level. Massive levels of debt can erode your finances, marriage, and even your emotional stability.
To that end, here are ten different things you can do to get out of debt and do your part to diminish that $4 trillion beast!
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Contents
- 1 1) Create a Tight Budget And Stick to it
- 2 2) Freeze Your Credit card
- 3 3) Change your lifestyle/habits
- 4 4) Pay more than the minimum
- 5 5) Ask for a lower interest rate
- 6 6) Implement the snowball method
- 7 7) Get a part-time job
- 8 8) Use windfalls to pay down debt
- 9 9) Sell your extra stuff
- 10 10) Rent a room to a friend
- 11 Wrap-Up
1) Create a Tight Budget And Stick to it
I know, I know….sticking to a budget isn’t a brand spanking new revelation for people working on their finances. But the reality is that you won’t be able to get out of debt unless your desire to be
If you really want to be out of debt then be disciplined enough to stick with the budget you have created.
One way to do this is by tracking all your expenses to make sure you’re on course. Start by saving your receipts, and putting them in a spreadsheet (like Excel).
Then make sure your expenses don’t exceed what you planned for. See? Easy-peasy.
Make sure to update your spreadsheet at least every few days to stay on top of things. This way you can monitor your spending in semi-real time.
And at the same, you’ll be able to adjust your spending when necessary.
If you don’t know how to create a budget, you can read our article How to create a budget to succeed financially
2) Freeze Your Credit card
It´s awfully tempting to bust out your credit card and use debt when you’re broke, isn’t it?
Well, one way to prevent yourself from using your card
If that seems a bit over-the-top to you then consider this. Many people recommend cutting your cards up so you don’t use them. But let’s face it, you may have a legitimate use for your card someday. Like, improving your credit. (By the way, you can check read our post on how to raise your credit score by 200 points!
Cutting it up is permanent but a frozen card can still be used after a few hours defrosting. And that defrost time will give you extra time to decide if you really want to use the card and increase your debt.
3) Change your lifestyle/habits
It’s easy to overspend on unnecessary things. Most of the time the extra money we spend is related to our bad habits.
Or maybe it’s not bad habits. Maybe you just work hard and feel that you deserve a treat now and again.
But don’t you deserve to be debt-free more than you deserve that night out on the town?
If you spend too much lifestyle habits, go back and review all the extra, non-essential purchases you’ve made.
Basically, all the expenses that are not real needs (food, rent, electricity, etc.)
After you’ve done that, create a plan to cut down all the extras that inflate your monthly expenses. Make some serious decisions about what to cut back on and find free alternatives.
For example, instead of going to a club with friends, go to the beach or to the park. It’s time to make sacrifices!
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4) Pay more than the minimum
If you only pay the minimums you (and your children, and your children’s children…) will be paying off your debt for the next hundred years or so.
To avoid this nightmarish family tradition, you must pay more than the minimum.
Not only will it free future generations from bondage, but it will also actually save you money. Think about it, the faster you pay your debt, the less time your lender will have to charge you interest. And, this is a must if you’re looking to get out of debt fast.
5) Ask for a lower interest rate
It’s not always easy to be successful with this strategy. But contact your lender and explain your history with them, if you’ve been a good customer, paid on time, etc.
It may be necessary for you to increase your credit score before doing this but it is possible.
6) Implement the snowball method
The snowball method makes you focus on paying off one debt at a time. To start, list all your debts from smallest to largest regardless of the interest rate.
Focus on making extra payments on the smallest debt while you continue making only the minimum payments for the larger ones.
Then when the smallest existing debt is paid off (yay!) go on to pay off the next smallest.
7) Get a part-time job
Getting a part-time job is not for everyone, but if you can spare the time you should consider it. It’s a sacrifice that can really pay down your debts quickly.
As you know, many retailers hire temporary workers to cover a specific season of the year. You can take advantage of this to earn some extra money and get out of debt fast.
8) Use windfalls to pay down debt
If you suddenly find extra cash being rained down on you the first thing you should do is grab a bucket and collect as much as you can.
The second thing you should do is anything except shopping.
But seriously, if you receive a bonus at work, or a tax refund, that money can be used to pay down your debt.
9) Sell your extra stuff
Take a leaf out of the minimalist’s playbook and start selling your extra stuff.
Look around your home and notice all the things you don’t use:
- That unopened vegetable dicer you got at the office Christmas party. Check.
- Those Victorian-style dolls you inherited from your grandmother. Double Check.
These unwanted things are a potential source of income as well. Because while you don’t want them, there are people out there who do (strangely enough).
Organize a yard sale, or create an eBay account and turn your clutter into cash.
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10) Rent a room to a friend
If you have a spare room that you rarely use, you can consider renting it out to someone you know part-time.
This could potentially bring in a few hundred extra dollars that you could use to pay down your debt fast!
Wrap-Up
I hope that this post proves useful in your journey out of debt.
If there are other strategies that have worked for you that I haven’t mentioned here please mention them in the comments below.
Cheers!
Idalmis
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