How to Get Out of Debt Fast
You can get out of debt! I'm so glad you have found this page because I am going to help you finally free yourself from the financial burden of too much debt. I know what it's like because I have been there myself. Getting out of debt does not have to be a painful process, or even a difficult one. However, it is going to be hard on you in some ways. Mainly, you will have to break yourself of some very bad habits, but I will show you how to get out of debt with some very simple tips.
You will have to learn a couple of things you may not have ever known before, but the result is exhilarating. When you see these ideas put into practice and actually working, you will be so excited to continue on your path to financial health and debt-free living. It all starts with these seven tips on how to get out of debt. Hint: if you can follow the first one, your halfway there.
Commit
You can get out of debt. I believe in you. But you first have to ask yourself if you want to be out of debt. Don't laugh. It's not such a preposterous question. Really ask yourself. The reason this is so important is that you are embarking on a journey. You either will reach your destination, or you will end up back where you started. The determining factor is always how committed you are to your goal. If you are unwilling to put yourself out there and say, “This is happening. I'm doing this.” Then you aren't really ready to take that journey; But if you are committed to debt-free living, then these tips on how to get out of debt really will work. So, let's do this!
Balance Your Budget
Do you have a budget? Do you keep track of the money that goes in and out of your household? Is there a budgeted amount for various expenses in the home? If your answer is no, don't worry. It's something you can easily take care of, and it goes a long way to get you out of debt. The first thing you need to do is figure out how much money you really have to spend every month. That's bills from minimum balances on credit card statements to the mortgage. The grand total for the bare minimum you have to pay out every month has to be less than how much you make. If it doesn't, you won't be getting free of debt until you make a major change. Maybe sell your house, maybe change jobs, maybe find some other kind of financial support.
Get to an understanding of how much money you have to work with, where it needs to go every month, and how much you have leftover. For now, you will deal with the basics. As your money grows, the budget will become even more important because there will be more to allocate, and you will want to stay out of debt once you are free. So, start those good habits of tracking your money now.
Stop Spending
The next thing you need to do is stop spending so much. This could be a total freeze of discretionary spending, or just placing a limit on what you can spend. It depends on the size of your debt and how committed you are to getting out of it. If you habitually go to Starbucks every morning, afternoon, and night, you should cut that out because you're probably spending close to $30 a day that could be paying off debt rather than adding to it. Cancel or pause your subscription boxes too. You will have to ignore a lot of impulses, but it's going to keep your balances down and leave you with more money at the end of the month. That's what you need to get out of debt.
Make Smart Payments
It's so important to hit hard when it comes to paying off debt. Create a focused plan of attack so that your payments do the most critical damage. The way to do that is to pay the minimum balances on all but the account accruing the highest interest. Here's why. If you pay off another card, that high-interest debt keeps rising. If you don't put enough into it. The balance keeps coming back. It's literally throwing money away. When you funnel all you've got into it, it makes a dent. From there, the more you put in, the bigger your impact will be on the debt.
Some people like to pay small balances first because they like the thrill of an easy win, but that's a hollow victory. The money to pay off the small balance will likely not add up to the accrued interest on the big debt. Have a numbered list according to the highest interest to lowest, so that once the first debt is paid off, you can channel that payment into the next account.
Negotiate Balances
Another aspect in how to get out of debt is negotiations. Don't take it for granted that you will have to pay 100% of all your bills. You might, but you might not. You can call your credit card company and work out a deal with the legal department. They will negotiate with you and give you a workable plan to pay off your debt. Your account will be closed, and it will affect your credit score, but when you are getting out of debt, you don't need to concern yourself with your credit score. That rating will naturally improve as you get out of the red. Until then, stay away from taking on more debt.
Reduce the Interest Rates
Another thing you can and should negotiate is those interest rates. The faster you can impact any variable to the equation, the better. Lower interest means that balances will go down faster and with less money. It's best to have this conversation while your credit is at its best. also, if you have changed jobs to increase your income, you should definitely try and lower your interest as it impacts your debt to income ratio in a favorable way. Negotiating the terms of your debt is one of the best examples of how to get out of debt.
Sell! Sell! Sell!
You got into debt because you bought too much. Very often, its food that does us in. (They don't call it CONSUMErism for nothing.) However, very often we buy things we don't need because we think we have to have them, or we will use them later. (We don't and we won't.) Those things have dollar signs on them. By selling what you can, you not only stop the cycle of spending, you begin to reverse it. It helps you pay bills faster, and it prepares you for a less consumer-based approach to living. Some people go full-minimalist once they get started. It's really addicting, and it builds so much momentum.
What are YOUR getting out of debt fast tips? We'd love to hear what's worked for you! Tell us in the comments! And, if you found this post helpful we'd be so thankful if you shared it with your friends!