If you've acquired debt from credit cards, loans, or an unexpected emergency, you understand how stressful carrying debt can feel. And it's probably a high priority to pay it off quickly. Luckily, reducing your debt might be easier than you think. Here are three ways to get out of debt fast.
1. Lower Your Expenses
Cutting back on how much money is going out the door each month has an immediate impact on your bottom line. Every dollar you spend should serve a purpose. And when you sit down to look at where your money is going, you may identify several areas where you're essentially throwing money away.
Here are a few ideas for ways to cut back expenses right now:
- Consider going to the grocery store with a budget and plan to cook a few meals at home. Cooking a casserole and eating it for dinner for 2-3 nights this week instead of grabbing fast food can put a few more bucks back in your pocket.
- Take 15 minutes to go through all of your recurring subscription services for television, home delivery, music, apps, etc. Then, cancel the ones that you don't use or that you can live without for a few months.
- Use the "sleep on it" rule for all non-essential purchases. Each time you add something to a cart online that's a want, not a need, sleep on the purchase before you hit buy. In the morning, you may realize those slippers you wanted to buy for $20 aren't actually worth it.
- Challenge your significant other or a friend to a no-spend day or week. See who can go the longest without making a purchase.
- Call service companies to try and negotiate rates on bills like your cell phone and internet service. Companies may be willing to give you a promotional offer to keep you as a customer, especially if you've been regularly paying on time.
Once you've cut down expenses to the bare bones, it's time to look at increasing earnings.
2. Pick Up a Side Hustle
If debt payback is creeping along with the income from your day job, it might be time to look for extra earning opportunities. Side hustles have become incredibly popular and can be a great way to make quick cash that you can funnel directly toward your debt.
A few ideas for money-making side hustles are:
- Driving for Uber, Lyft, Instacart, or UberEats
- Walking dogs using a service like Rover
- Starting a blog
- Taking surveys online
- Sell household items you're no longer using
- Deliver online services like web design or content writing on Upwork or Fiverr
3. Choose a Debt Repayment Strategy and Stick to It
After you've decreased expenses and increased income, it's all about strategically paying down debt. Two of the most famous strategies for debt repayment are the debt snowball and debt avalanche.
- The debt snowball is a popular process that involves listing out all debts from the smallest dollar amount to the largest. You'll begin by attacking the smallest debt, throwing as much extra cash as you have on hand each month. Once that's paid off (hopefully quickly), you can then put your money toward the next largest debt. The momentum you gained by quickly paying down the first debt will propel you to the more advanced balances and keep motivation high.
- With the debt avalanche strategy, you'll again list all debts, but this time with the highest interest rate to the lowest. You'll aggressively attack the debt with the highest interest rate first. By doing so, over time, you'll end up paying less in interest.
Depending on how much debt you have and what motivates you, you may lean toward the snowball or the avalanche method. But what matters most is that you choose a strategy, figure out where to start, and stick with it until you're debt-free.
The Bottom Line
Debt isn't something that needs to hang over your head for years. By cutting back on spending, creating more income, and choosing the right repayment strategy, you can take control of your debt once and for all.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
Press Release Service by Newswire.com
Original Source: 3 Ways to Reduce Your Debt Fast
