Do you feel overwhelmed by debt? Do you have no idea where to start or what steps to take? We have some great suggestions for getting out of debt. How do you get yourself out of debt if it seems like there are so many obstacles in your way? How can you find the best ways to stop living paycheck-to-paycheck and save money each month? How do I get rid of all my credit card debt fast, without being able to pay off any other debts quickly too?
This article is designed with those questions in mind. It will give you 11 strategies that can help develop a plan and take action on your behalf!
- Your first step is to gather all of your debts and balances.
- Get a Consolidation Loan
- Pay Off the Minimum Monthly Payment on All Remaining Debts Except the Highest Interest Rate Credit Card Then Tackle That First.
- Pay More Than the Minimum
- Make More Money By side hustling.
- Sell Unwanted Items Online or Open an Etsy Shop
- Earn Extra Income by Teaching Online Courses
- Cut Unnecessary Spending
- Create an Emergency Fund
- Refinance Your Mortgage
- Tell the kids you’re on a budget.
- Cut back on eating out at restaurants or buying takeout food more often.
- Save on Groceries to Help Pay Off Debt Faster
- Avoid expensive hobbies
- Get rid of cable TV subscriptions
- Buy a Quality Used Car Rather than a New One
- Consider Becoming a One Car Household
1. Your first step is to gather all of your debts and balances.
Before you start, get as much financial information as you can. Make a file for each credit report from TransUnion, Equifax, and Experian and thoroughly review it. Keep track of your credit score at each agency. After that, get the most recent statement for each of your accounts:
- Student loans
- Personal loans
- Auto loan
- Credit cards
- Store cards
Next, list all of your debts and balances. How much is left on each account? How much do you owe altogether? How long will it take to pay off the entire balance if you continue making minimum payments? Can any of these accounts be put into forbearance or deferment for a temporary break in payments without penalty fees?
Are there interest rates that could change over time as loans accrue more interest (such as credit card purchases)? What financial situations might affect how fast you can repay what you owe (unemployment, marriage/divorce/pregnancy, having children living at home with you)?.
2. Get a Consolidation Loan
Consolidate your loan into one loan with a lower interest rate. By consolidating some debts into one larger bank loan, a consolidation loan, you may be able to get a better interest rate on your new consolidated account than if left as separate accounts. But here’s the kicker: there might even be less money available at first because now you need to make payments on only one account instead of several different.
3. Pay Off the Minimum Monthly Payment on All Remaining Debts Except the Highest Interest Rate Credit Card, Then Tackle That First
First, pay your credit card debt with the highest interest rate but do not forget to pay Minimum Monthly Payment on All Remaining Debts. There may be other debts that can make sense to pay off first.
Suppose you have a loan with an interest rate of 24% and another at 14%. In that case, it might make more financial sense to focus on paying the latter down as quickly as possible.
Paying the minimum monthly payment is better than nothing, but if your credit card has such a high balance compared to others, try hard not to miss any payments because this missed amount will rapidly increase due date balances each month, thus resulting in higher interest charges.
Do Not Miss Any Payments! Missing even one payment could cause your account to go into default or collections, which would hurt your already poor credit score further. Keep checking back every few months for ways you could improve things like having fewer.
4. Pay More Than the Minimum
Next, consider working towards paying more than the monthly minimum payment on all of your debts except for the one with the highest interest rate.
How much extra you pay will depend somewhat on how quickly you want to get out of debt and how soon you’ll need access to that money again (like if it’s in an emergency fund). But even $20 or $50 can make a big difference over time when put toward principal reduction every month!
For example, say your credit card balance is currently at its limit ($5000) and has an 18% annual percentage rate (APR.) If you’re able to add another $25 per month, then after 12 months, that would reduce the APR by about half.
5. Make More Money By side hustling.
Earn more income by side hustling and get out of debt. How to make more money and save it while paying off debts? The easiest way is probably side hustles like Uber or Lyft, which you can earn extra cash by driving passengers around town in your free time.
Just think how much good that could do for getting rid of student loans, credit card bills, car payments! How about working as a virtual assistant at home on the computer? Do some research into what kind of work might be available in your area with online job postings.
6. Sell Unwanted Items Online or Open an Etsy Shop
You can also sell your unwanted items online or at a local store. This will help you pay off your debt faster since it provides additional money. How to sell unwanted items online? You can sell all unwanted things through Craigslist, eBay, or even Amazon, where you will get the best price for your products/items because these are popular sites with lots of users who want to buy anything they need at affordable prices.
You can also make money from home as a virtual assistant (VA) working on projects like data entry, transcription services, etc.
7. Earn Extra Income by Teaching Online Courses
You might also consider teaching people how to do something that interests you (and what doesn’t), like web design or computer programming, since there’s always someone looking for help in those areas! How much money could be earned here is really up to you and time spent on it, but one way to make extra income from home is by teaching courses online, which may include live video classes via Skype. You can earn around $50-$75 per hour. How awesome is that?
8. Cut Unnecessary Spending
The first step to getting out of debt is by cutting unnecessary spending. You can cut your expenses by living a more frugal life, shopping smartly, and finding cheaper alternatives for things you need. How do I find a cheaper alternative? Start changing some of your bad spending habits into good ones to save money without making any effort at all!
9. Create an Emergency Fund
An emergency fund is a sum of money set aside for unplanned expenses. How much you save in an emergency fund depends on your financial resources and lifestyle.
How do I get started? The first step to creating an emergency fund is finding ways to cut back on unnecessary spending, then putting that money into the bank every month until it becomes something substantial enough to cover emergencies such as car repairs or medical bills.
Many people find it hard to imagine they can start saving right now but try making small adjustments like canceling cable TV subscriptions (or any other premium service) and cutting down on eating out at restaurants or buying takeout food more often. You might be surprised how quickly those little changes add up!
10. Refinance Your Mortgage
Refinance Your Mortgage with a better interest rate or more favorable terms. How do I refinance my mortgage?
The first step to refinancing your mortgage is by getting a quote from an unbiased source. Start looking at mortgages online or speak with one of our experts about what’s available for homeowners who want to lower their monthly payments and save money over the life of the loan!
11. Tell the kids you’re on a budget.
Kids are aware of their parents’ finances, so it is important to let them know you have a budget. How do I tell the kids we’re on a budget? Start by telling your children that money doesn’t grow on trees and sometimes there are things you can’t afford because they cost too much money.
12. Cut back on eating out at restaurants or buying takeout food more often.
Cut down on eating out at restaurants or buying takeouts more often to save extra cash every month! How do I find cheaper alternatives for restaurant meals?
You might be surprised with how many ways there are to cut expenses without making any effort whatsoever- those little changes add up pretty quickly! Get started just by canceling cable TV subscriptions (or any other premium service) and cutting down on eating out or buying takeout more often.
13. Save on Groceries to Help Pay Off Debt Faster
Do you find yourself spending a lot of money at the grocery store? If so, here is some advice on how to save. First of all, start by writing down what meals and snacks you will have during the week or month before shopping!
Secondly, stay away from impulse items that aren’t on your list just as much if not more than those things- try not to go into stores hungry because then there’s an increased chance they’ll end up in your cart too (and who wants extra calories?).
Finally, remember: it doesn’t take much for our minds to tell us we’re hungry when all anyone needs.
14. Avoid expensive hobbies
Many of us like to spend money on hobbies that can quickly turn into expensive habits if we’re not careful! How do I avoid an expensive hobby?
Start by assessing how much you spend each month and whether or not it is worth it. If you aren’t sure, try cutting back for a few months until you reevaluate.
15. Get rid of cable TV subscriptions (or any other premium service)
Getting rid of cable may be one way to save some extra cash every month without making too big sacrifices in terms of entertainment value. How do I get rid of cable TV subscriptions? First, start looking at ways you might be able to cut back on unnecessary expenses- canceling services such as television packages.
16. Buy a Quality Used Car Rather than a New One
Looking for a new car? How about a used one instead? How can I buy a quality used car rather than a new one?
It is important to consider your options carefully before making any big decisions. Buying a quality used car may be the way to go if you are strapped for cash but still need reliable transportation, so take some time out of your day and start looking around!
17. Consider Becoming a One Car Household
Many people are surprised how much money they save by becoming a one-car household. How can I become a one-car household?
The first thing you need to do is make the decision- decide whether or not it will be worth your time and effort to get out of debt faster! If so, sit down with your spouse/partner/roommate(s) and come up with suggestions for who should give up their vehicle based on different criteria (such as distance between work locations). Take into account that whoever gives up their vehicle needs to have another way home even if it isn’t available right away due to cost issues or other factors.
You can save a lot of money just by cutting back on the little things!
Start even with these simple changes, and you will be well on your way to financial freedom. Try making some easy adjustments in daily life now, so it becomes natural over time- before you know.
By following these tips, anyone can live with less stress about money, which means focusing on what matters most.