We all have been through this phase of life where we had to pay off our debts. It is very taxing emotionally because when you have debts it leads you towards stress and it in turn affects your mind and body. You can easily get into debt but coming out of it might seem to be a painful experience because in the beginning we don’t feel much burden but as days pass by we tend to get deeper into debts. It generally starts with a small amount and even before we realize the amount gets too big to repay all at once.
Here are simple tips which you can try to come out of debts –
- Put a stop to debts – First thing first, if you want to come out of debts then stop the habit of creating more and more debts. In order to clear one debt you indulge in other debts so you are actually not paying off anything at the end of the day. So you need to stop yourself from going into more debts.
- Prioritize your debt payments – You must make a promise to yourself that you will not indulge in anything fancy or luxury unless you have paid off your debts. If that means that you have to give out more from your paycheck then do that. This will help you pay off your debts quickly.
- Don’t take the luxury of paying the minimum – We all limit our payment to the minimum and that is where we are hurting ourselves. By this method, it will take our lifetime to pay off our debts, therefore it is important that we pay more than the minimum limit.
- Budgeting your needs – If you think you can manage by having one car then why invest one buying another car. Instead use the money to pay off your debts and clearing all the financial stress out of your life.
- Seek a helping hand – If you think that it is becoming too much for you to pay off the whole debts then you can ask your partner to share. This will help you in reducing the debts within no time because now both of you are working towards achieving the same goal.
- You can also get a second job – The amount is too big for you and the current job doesn’t produce a big paycheck to pay off that amount! Then look for a second job, it can be tiring but at the end of the day when you will see your debt amount getting reduced it will be self motivating.
- Try and work towards getting yourself a low interest rate – Take this step before you miss out your credit history. If you are feeling that it is becoming harder for you to keep up with the payment, then ask your creditors to lower the interest rate. If you have been paying regularly within time, then it is a possibility that they will consider your request.
- Putting up items for sale – You can give out some of your possessions on eBay or arrange a garage sale to get some extra money to pay that big amount. Anything that will help you reduce the amount of debt is worth trying.
- Record all your expenses – Doing so will help you to cut down on the unwanted and irrelevant cost for the time being. It might seem to be a luxury now to send your dog to a salon to have a bath instead on a weekend you try and give him a bath. This will save you money, which you can use substantially.
- Paying off as per interest rate – Start paying off the debts which have higher interest rate for obvious reason. When you are paying the higher interest debt continue paying the minimum payment for the low ones so that you keep a track on the bigger amount.
Don’t just sit and plan, but do implement it too. Otherwise, it will be very difficult for you to manage the whole amount of debt that you have incurred.