If you’re like most people, you’ve probably been trying to get out of debt for a while without much success. Maybe you’ve been searching the Internet for blogs and articles on topics related to debt and personal finance, which have helped you understand how to get out of debt for good. Or maybe you’ve tried your hand at debt reduction strategies, only to get discouraged when you didn’t see results as quickly as you wanted. Our goal is to help you understand the best way to cut debt in your life and to help you stay motivated in the effort to reduce those debts such as:
- Pay more than its minimum payment
When you borrow money, you don’t pay all the charges at once. Instead, you pay them in a series of small cash payments. This is called amortization. You make payments based on how much you borrow and when you borrow it, and when you return it to the lender. For example, if you borrow $1,000 for six months at an interest rate of 12% per year, you’d pay a total of $720.12 in interest and principal, or $100.12 per month.
- Pick some side hustle
There’s no denying that people in this country work hard to pay the bills. But that doesn’t mean the idea of picking up a side hustle to make extra money won’t get you excited. From self-publishing to online shopping to blogging, there’s a lot of jobs that are fast becoming more popular than ever.
- Sell things you don’t need
Even if a job is perfect for you, the fact of the matter is you’re going to leave that job at some point. Even if you’re not going to be fired, you will naturally have less time for that job. So whether you’re leaving the job for a new one that better fits your needs or simply because of personal circumstances, it’s a good idea to start thinking about what you’re going to do with all of your stuff.
- Ask for a lower interest rates on your credit cards and negotiate other bills.
It can be difficult to negotiate a lower interest rate on your credit cards. If you are not already at a good credit score, it could result in higher finance charges than you would like. So, there is a risk involved in negotiating with a company or in negotiating a lower interest rate. However, it is an option if you are willing to risk a little to save a lot.
- Drop your expensive habits
Does saving money mean that you’re organized and disciplined enough to stick to it? Not if you’re investing your money in the wrong ways. If you are in debt, the last thing you want to do is spend more money on the same things that got you there. And there are ways you can save money, and also save money. We live in a world of money. It’s all we ever think about; bills, debt, money, savings, investments, and the like. So it’s natural that we want to cut back on it. The trick, however, is figuring out which (if any) habits to cut that will really make a dent in your savings. While many people have an easy time shedding habits that don’t cost them anything (like eating out too much), it’s not so easy to pick the habits that will let you spend less money.
The vast majority of debt you or your clients have should not be there. Yes, I’m talking about credit card debt, but not just credit card debt. There are other debts that are just as bad and can be just as damaging. For example, medical bills that you don’t have the funds to pay can wait, but the interest on credit cards that you can’t afford to pay can’t.
In fact, paying your credit card debt can actually hurt your credit score. So before you go to a debt consolidation company, make sure you have a realistic plan to pay off those debts and keep your credit score in good shape. When you take on debt, it can potentially lead to a number of problems. What starts as a financial emergency can quickly become a life-ruiner.