It is easy to go beyond your means and fall into debt. Whether day-to-day expenses or a catastrophic event has led bills to mount, it is commonly difficult to find your way out. It is not fun trying to live life with full credit cards and loans that are due, especially when you have little money in the bank. Here are 10 steps that will help with paying off debt quickly:
1. Forget the Minimum Payments
Credit cards may be tricky. You may think that making a minimum payment each month will help you to pay down what you owe. Many times, it will take a person years or decades to actually accomplish this goal. Also, it will only work if you are not adding to the balances. Whether it is a loan or a credit card, the best way to eliminate the debt is to submit more than the minimum each month. This saves on interest as well.
2. Try the “Snowball” Technique
If you decide to pay more than your minimum payment, the “snowball” method can speed the process. In the beginning, you should organize your debts from least to greatest. Place all of your extra money on the smallest debts and make regular payments on the larger ones. After the small debts are gone, all of your money can go toward the larger balances. This “snowball” effect helps to pay down most of your debt in a relatively short period of time.
3. Balance Transfers
Most credit card companies offer special low-interest deals for balance transfers. Even though you may have to pay a small transfer fee, it may be worth considering. Going a time without high interest will help you to put a larger chunk of cash onto your debt.
4. Part-Time Employment
Most people have steady jobs. However, this income is not enough to put a dent into debt repayment. Finding a part-time or seasonal job may do the trick to ignite a debt-free lifestyle. Whether you decide to cut grass on the weekends, babysit, or get a job at the mall during the holidays, you will earn extra money that can be used to pay off your debts. Accumulating extra cash makes it easier to pay bills down fast. After your debts have been paid, you can drop the second job.
5. Negotiate Interest Rates
You may be surprised to learn that it is easy to negotiate a better interest rate through a simple phone call with your credit card company. Many times, the standard rates are extremely high and make it impossible to put a dent into a balance. Speaking with a representative from your credit card is definitely worth a few minutes of your time. In most instances, people with a solid credit history will be granted lower rates.
6. Establish a No-Frills Budget
Everyone enjoys certain comforts in life. However, these extravagances may be the reasons why you are in debt. The best way to pay debt off quickly is to cut expenses to a minimum. This means skipping dinner at your favorite restaurant, staying home with the television over watching a movie at the theater, curbing your weekly shopping trip to the mall, or cancelling your expensive cell phone plan. All of these things can return at a later time, but a temporary cut will put you on a better path. With every successful bill that becomes paid, you can add one thing back into your budget.
7. Selling Unnecessary Items
The dress that looked good in the store is now taking up space in your closet. The same deal applies with the other outfits and shoes. Also, your old furniture is just blocking room in the garage. Instead of holding onto items that you no longer use or need, it is smart to try and sell them. Making a small amount of money from unnecessary things is better than nothing. With today’s social media, it is simple to post ads and to unload some of your old possessions. Even a traditional yard sale will help you make some quick cash.
8. Cut Up Your Cards
Even after you have been paying down your debt, it can be tempting to crack out the plastic and splurge on certain items. Do not let this type of thinking put you back into debt. If you are not willing to cut up your credit cards, try locking them away or freezing them in cups of water. When you are contemplating a purchase, this will give you time to think and assess if the purchase is wise.
9. Stay Motivated
Paying bills is never fun. Even at a fast pace, it may seem like it takes a long time to achieve your goal of attaining a debt-free life. Staying motivated is a great way to stay on track. Create a vision board that shows how much better your life will be when your debts are gone. Whether your long-term goals include saving money for a down payment on a new home or taking a needed vacation, remembering these goals will make the process easier.
10. Work with a Trusted Debt Consolidation Company
Debt consolidation can be a help if you are holding debt from various creditors. With multiple bills, you may have trouble keeping track of everything. This means that you may accidentally fall behind or have trouble meeting all of your minimum payments. If this is the case, a smart idea may be working with a debt consolidation company. Many times, this company may help you take out one large loan to pay the rest of your smaller debts. This means that you only have one payment. In certain instances, a debt consolidation specialist may work with your existing creditors to gain lower interest rates or fees or to lower your repayment amounts.
If you find that your bills are weighing you down, it’s time to seek help from a trusted debt consolidation company. It may be the first step toward gaining financial freedom. Contact our staff at Christian Debt Counselors to see how we can assist you as you become debt-free.