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Unfortunately, getting yourself into debt is a whole lot easier than getting yourself out of it. Once that hurricane picks up speed it can leave a pretty destructive path of money owed in its wake. It is so important that you try your very best to get on track and pay off your debts.
Of course, you’re standing at the bottom of the mountain and looking up at the peak – a Mount Everest of repayment arrangements. It’s not exactly a view anyone wants to wake up to, and not a challenge anyone is enthused by.
You’re looking at your situation, and all you see years and years of hard work, sacrifice, and heartache when, in truth, there are plenty of strategies out there that can help you pay off your debt much faster than this. Yes, the mountain is the same size, but the battle doesn’t have to last as long.
So if you’re ready to get yourself out of debt and out of stress, it is time you adopted these tried and tested strategies and methods:
Get Yourself Out Of Debt By Paying More Than You Have To
Okay, so the average credit card balance of American citizens currently stands at around $16,000. Add to that the typical 15% interest rate, and it is easy to understand why your battle to have a debt-free life looks like an unwinnable war. If you pay the minimum monthly payment, you’re looking at almost 14 years before you finally pay it all off.
That is where the pay more than you have to strategy comes in. It’s great because it can be used on any debt you have. Student loans, credit cards, mortgages, personal loans – whatever. The more you can afford to pay off the quicker it will happen, and the less it will cost. You can usually refinance student loans in certain situations to make payments more manageable.
This is the single most effective strategy available to you. It may feel like an insignificant amount now, but paying just an extra $20 a week (or a month) is going to have a major impact over the course of a decade. If you don’t think something small can have an impact then you must not be a parent.
Make Sure Your Credit History Is Accurate
So many people – in fact, too many people – just accept the credit rating as gospel, but it may not be. It is well worth it to check everything on your credit history and make sure it is up to date and accurate. If it’s wrong, it could have a significant impact on even the more mundane things like your insurance premiums.
You see, insurance companies use your credit rating as part of the variables that make up your premiums. This goes for things like home insurance, car insurance, life insurance and just about every other form of insurance out there. So having two incorrect late payments show up your credit score doesn’t just affect your rating, it affects everything that falls within that bell curve. So check your history for any inaccuracies, get them amended, and you should see a nice chunk of change when it comes to your insurance renewals.
The Snowball Method
This one latches onto the paying more than you have to method of paying off your debt. If you are into the idea of paying more than the minimum monthly payments, then this strategy could maximize the efficiency and speed in which you pay off your debts.
Make a list of all the debts you have and put them in order from smallest to biggest. After this, throw any extra money you have at the smallest debt on the list, while still making the minimum monthly payments on your other debts, of course. Once you have paid off the first debt, well, you move onto the next one, throwing any extra money you have at that one. This process keeps going until you’ve paid them all off. Simple but effective.
Get Yourself Some Extra Work
You may have just read about the snowball method and thought to yourself, “Where am I going to get extra money from?” Well, there are more ways than ever to cash in your skills and talents and do it in your own time. It is simply a matter of knowing what you have to offer and then knowing how you can monetize it.
Let’s say you have a way with words; it could be that you pick up a few writing gigs on Upwork. Perhaps you are good with kids and have evenings off, then why not become a regular babysitter. Apart from the most extreme minimalists, everyone has clutter and/or junk in their home that they don’t need. So why not sell it? It could get you that extra money you need.
Become That Little Bit More Thrifty
One of the most efficient ways to get extra money that will allow you to pay down your debts faster is to become frugal with money. There are TONS of ways to do this!
One method is to come up with a budget that cuts out luxury spending. This may sound horrendous, but it can be an incredibly rewarding period in your life. People that go down this route often find out a lot about themselves. It’s nice because you can choose the degree of severity you go down. You could just make your grocery list a needs-only list, or you could go further and stop eating out. It is in your control. But the more you sacrifice now, the quicker you’ll be able to pay off your debt.
Every little bit helps; trust us on that one.
Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.