No one wants to be in debt. Well, perhaps the exception is a mortgage, since at least there you’re taking ownership of a valuable asset. But that said, there’s no harm in paying off your mortgage as fast as possible if you can. That way you pay a lot less in interest, and become full owner of your property faster.
However, this article is specifically about unsecured debt. Debt with no asset attached to it (unlike a mortgage on a house). This includes credit cards, loans and overdrafts.
All those debts do is cost you money through interest payments. Plus, financially, and mentally, they can drag you down. You might even end up not opening the mail out of worry.
So it’s important to get out from under your pile of debt as soon as possible. Since every month it’s with you, the more money you’re wasting on interest. On large debts, this could even be thousands in interest per year. That’s thousands you’re literally throwing away!
So here are some tips to help you get out of debt as quickly as possible:
Slash Your Living Expenses
First of all, if you really want to get out of debt, you need to minimize your personal outgoings as much as possible. Since the more money you have left over each month, the more you can put towards paying off your debts faster.
Of course, cutting expenses can be difficult if you have a family. Kids always seem to have expensive emergencies! But it’s worth trying as much as possible to reduce outgoings.
As tempting as it is to go out every night, and splurge on the finer things in life… Well, that could have been what got you into financial trouble in the first place! So best avoided. Do give yourself little treats though.
Can You Increase Your Income?
This can be easier said than done, but making more money is another fast way to get rid of any debt you may have.
If you’re currently out of work, get some sort of paying work as soon as possible. What are your skills? What can you do? Everyone can do something.
If you’re currently in work, can you get a pay rise? Or perhaps even change jobs and get a pay increase.
And there’s plenty of ways to make extra money from home. Sell on eBay perhaps? Have a root around your basement or attic, and see what you can sell. Consider selling on Gumtree too. Plus there’s freelance jobs like website testing and transcription you can do.
Ask for Help if You Need It
Don’t think you always need to go it alone. There’s government organizations specifically to help people with debt. Plus businesses that specifically help those with debt to manage it, and clear it.
And you may potentially want to look into loans for debt consolidation as they can help take the pressure off. This way you can pay off your debt over a longer period.
Pay Off the Highest Interest Debt First
You’ll notice some of your debt has a higher interest rate than others. That’s the debt you want to work on first, since it’s compounding the fastest.
Move to Zero Interest
If you can, moving your credit card debt to zero interest cards can be hugely helpful. Many cards have offers that allow you to have zero interest on balance transfers for a long time. Of course if your credit report is not in good shape, qualifying for such cards may be tricky. But definitely look into it, as it can save you so much money.
Now, these five tactics may sound simple, but they’re hugely powerful. Put them to work today, and you might be debt free in 12 months!