5 Ways to get out of debt. Getting out of debt isn’t as easy as getting into debt. For most people the swipe of a card is a quick and simple way to purchase goods and services. Banks and credit card companies spend millions to make this process easy. “Out of site, out of mind.” Debt doesn’t register until the bills arrive while interest charges and fees add up resulting in mounting debt.
Below are 5 Ways to Get Out of Debt:
1. Spend Less
If at the end of the week your purse is full of receipts, you’re spending too much money. Now is the time to take a look at your spending. Start a budget.
See where you can cut back on spending so that you can direct more money toward paying down debt.
2. Pay More Than The Minimum
Pay more than the minimum payment on your bills. Minimum payments will keep you in debt for years adding to the high interest earned by the credit card company. There are many ways to tackle debt. My personal favorite debt reduction method is The Debt Snowball. Line up your bills in order, from the smallest to largest bill regardless of interest rate. Pay off the smallest bill first, then add the money from the smallest bill to the next bill, and continue the process until all your bills are paid.
Another debt repayment process is the Avalanche Method. The avalanche method requires you to place your bills in order of the highest interest rate. Pay off the bill with the highest interest rate first then continue this process until all your bills are paid. Many argue that the avalanche will save you more money. The important thing is to just get started.
3. Get A Side Hustle
A side hustle will give you extra income that you can pay directly to your debt. If you enjoy writing, become a freelance writer. There are many online websites such as Fiverr and Upwork that can connect you with people looking for writers. If you like to craft, consider selling your crafts on sites such as Etsy.
Uber and Lyft allow you to earn extra income driving your car. Sell items that you no longer love or need by selling them on Ebay. Ebay is a quick and easy way to get rid of items that you no longer need or want. It’s an excellent way to clear out clutter from around the house.
If you’re good at home repairs, sign up with Home Advisor or Mr Handy. Remember tutoring and baby sitting are good ways to earn extra income.
Start a YouTube channel; share your interest and hobbies with the world. You may be able to earn extra income.
4. Reduce Subscription Services
We all enjoy home entertainment. Taking a look at your subscription services and eliminating the ones that you don’t need can be a great way to save money. Rather you subscribe to TV, magazines or deliveries, it’s an opportunity to save. Decide which service or services you absolutely need. Many see streaming services as a luxury, others see it as a need, especially if you have children.
5. Don’t Buy New Cars
Buying a brand new car while your trying to eliminate debt can feel like an uphill battle. If you have a car, try to drive it until your debts are paid off. Instead save your money for a car. It is possible to purchase a car with cash. If you absolutely must buy a car during this time, look for a reasonable used car for a good price.
Getting out of debt isn’t easy. Mindfully watching your spending while sticking to a budget can help you to reach your debt free goal.