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Buried in debt?
You’re not alone. The average American has $38,000 in personal debt that includes a mortgage and credit card loans. That’s a pretty hefty sum.
Being in debt can be a stressful, scary situation, but it is possible to get out of it.
Read on for our tips on getting out of debt fast
Curb All Unnecessary Spending
Whether it’s a daily latte, going to the movies every weekend, or getting takeout for dinner a few times a week, all of these expenses add up. Now is not the time to be spending money on items, services, or subscriptions you really don’t need. Try to stop all discretionary spending until you’ve gotten your debt under control.
This doesn’t mean you can never have fun or buy yourself something pleasurable ever again. This is a temporary measure you have to take in order to dig yourself out of debt.
Ask yourself before making a purchase if you really need it. If the answer is no, wait until you’re in a better financial position to buy it.
Pay More Than the Minimum
Credit card companies know what they’re doing when they give their customers a stated minimum payment on their bill. They know that they will continue to accumulate interest while making the customer think they’re making progress towards their debt.
Interest adds up quickly and the higher your statement remains, the higher the monthly interest you’ll be charged, which just bumps up your debt again. Beat them at their own game by aiming to pay more than the minimum amount due each month.
Don’t Be Late with Payments
Credit card companies charge a late fee each time you fail to make a payment by the due date. In most cases, this can be about $35. That may not sound like much, but it can add up over time, and worst of all, your interest rate will increase each time you miss a payment.
When credit card companies don’t receive their payments, they will begin contacting you. If this has already happened and is excessive, you can hire a debt collection attorney to stop the harassment. However, this can be avoided by making payments on time.
If you’re struggling to come up with the money every month by the time the due date rolls around, call your credit card company. Ask if the due date can be changed so you can make payments—most are happy to adjust it.
Consolidate Your Debt
If you have several credit cards or loans, it may be worth your while to consolidate the debt. This means they get combined into one bill with a minimum payment that is usually easier to make compared to paying multiple bills.
Debt consolidation usually means having a lower interest rate as well. Your credit score is likely to improve over time as well. Some debt consolidation services come with upfront costs, so do your research on the pros and cons before deciding to go this route.
If you’re stuck in debt, you can also consider getting an easy loan like a signature loan, where the interest rates are lower, and you can get approved immediately without worrying about your credit standing. It can help you catch up faster with your existing debt and prevent further financial trouble.
Don’t Be Buried in Debt Any Longer
Now that you know about these tips, use them to stop being buried in debt.
Getting out of debt can be a nerve-wracking experience, but remind yourself that it can be done. You just need to stay diligent about saving extra money and making consistent payments on time.
Thinking of launching your own online business to raise money to pay off debt? Check out our Business section for some great ideas.