If you are in a vast debt and want to get out of debt within a certain period of time, you’re in the right place. Go through the article in 10 minutes and see how easy it is to get out of debt.
Paying off debt may be frustrating if you don’t have a right plan. This is a step by step plan to go ahead to paying off all your debt.
1 . Make a debt payment plan and pay the smallest amount first
First of all make a list of debts you have from smallest to largest regardless of the rate of interest. Target the smallest amount to pay first and repeat it for the next. It may sound ridiculous to you because you may think lots of time to take to pay all debt. But it’s very much effective due to emotional matter.
Many personal finance experts will say to pay at first the amount with a higher interest rate. But, this is a psychological matter that motivates you when you can pay off your first debt within a short time. But, it will be frustrating when you will see, you couldn’t pay full debt after trying for a long while.
When you come to pay a fraction of large debt, once you would be frustrated after payment fews of the fractions of a large debt. But if you choose to pay the smallest amount first you would be confident to yourself that you could.
2. Stop or reduce using credit cards
Most people can’t use credit cards wisely, because this is a common psychology, you can’t control your spending habits when it comes to availability of money. Credit card is one of the best sources of cash in advance by others. You will spend more than usual with your credit cards.
But when it comes to cash or debit cards you see the money is going in your eyesight. That’s why cash or debit cards are more convenient to pay off debt than using credit cards. People spend more money with credit cards but they will spend less when it comes to cash.
One of my friends is in a huge credit card debt. He can’t pay the balance he’s already used but minimum balance and interest. I think credit cards are the greatest traps to fall in debt.
If you are asked to spend whatever cash you have, you will limit what you have. But it is only natural that credit card usage will cost you more than your limitations.
3. Create a budget that fills the basis needs
If you really want to pay off debt fast you will need to cut down your expenses as much as you can. There’re a lot of tools to make a bare-bones budget and spending tracker. There are many budgeting and spending tracker apps available online or you can use a spreadsheet to create a budget and track your expenses on a daily basis.
A good budget can help you to get the information regarding where your money is going. Count your every small penny. Cut all the unnecessary or less necessary expenses off. Keep yourself mentally prepared to spend within the budget. Never exceed the budget.
Add the amount of debt you want to pay per month in your budget.
4. Cut off all unnecessary expenses
Another advice on getting out of debt in the quickest time possible is cutting off all unnecessary expenses. You should have to differentiate between the wants and needs. Identify your wants and needs. For example, going out to dine, cable TV, travelling, Gym membership etc these are the unnecessary expenses to completely cut off until getting out of debt.
5. Start a side hustle
If you are a job holder and get a fixed income you can try a per time job or business in your aspire time. Because your income is limited you can’t pay off debt within a very short course of time due to fixed income. And you have to maintain a minimum lifestyle. It’s easier to get out of debt fast by making a side hustle.
6. Sell things that no more you need
If you’re looking for a bundle of cash, sell the things that belong to you that you rarely use or even no more need. In regular life we have to buy many things, they provide value to us for a few days or months. Then things are laying down year after year without providing any value. But, one’s dust one’s necessary. You can sell these stuff in a marketplace with a reasonable price and lower your debt.
7. Sell the car
Your car costs you every month and that’s why you’re in a huge debt. I think those who are in debt shouldn’t buy a car. Because, a car makes you poor or in debt. Cars cost you everyday whereas you can use public transport or ride sharing service. Think that, do you really need a car ? If the answer is “no” why late? Because your car is costing you every month a huge amount of money.
You may think that is only $250 per month but you should calculate the price of fuel, maintenance, Parking charges, insurance cost etc for every month. If there are no business issues with your car you should sell your car immediately or you shouldn’t buy a new car now.
8.Ask your employer for a raise
It’s time to negotiate with your employer for a raise. If your employer agrees to a raise then it’s a chance to become free of debt for some days earlier.
You’re in debt because you didn’t calculate your income and expenses yet. But it’s time to count every single dollar otherwise your life will be destroyed with atomic power of debt. Once I was in a vast debt because I couldn’t realize or calculate the money in and money out. From my real experience I’ve shared with you guys some important ideas for getting out of debt fast.