While getting into debt can be very scary, the only scarier thing is not having a way out. One of the most common scenarios that happens when someone gets into debt is that they panic, but don’t create a plan. Having a plan will make the time you’re going to have to spend getting out of it, easier. Here are some ways to get out of debt faster.
Pay more than the minimum. This is one of the top ways to get out of debt faster, as it not only helps you save up on the interest of the debt, but it also speeds up the payoff date.
The snow-ball. Create a list of all of the debts that you owe from the smallest one up to the biggest. Throw away all of your extra funds at the smallest balance, while making minimum payments on the bigger ones. Once the smallest is paid off, start putting that money toward the next small debt until that one is paid off. Get the idea? This is often called the ‘snowball method.’
What you should see here is, over time, your small balances disappearing, leaving up more money to pay off on your larger debts. Basically you are paying down the smaller ones first while saving the largest for last. This method is mostly to help you psychologically feel like you are making a difference.
The next tip is to get a side job. Be sure that any extra money you earn, you use immediately to pay toward your debt. A side job doesn’t have to mean an entire second job where you clock in and out. You can help babysit the neighbors kids, or maybe wash cars on Saturdays.
Live smaller than your means. If you are really determined to pay your debt off quick, cut your expenses as absolutely low as you can. This means cutting cable, dining out, and a drastically edited grocery list. Instead of your weekly home-made meals, you might choose to switch to $1.00 turkey pot pies instead. This is a very bold method, but you will definitely be able to pay more toward your debt.
Sell what you don’t need. If you look around your house, there’s probably lots of things you have that you never use that you can sell for some fast cash on Craigslist, or websites of that nature. If you live in a neighborhood, have a garage sale.
Ask for lower interest rates on your credit card. Don’t be afraid to call your credit card company and ask them if they’ll negotiate the interest rate. Surprisingly, many people do it. If you have a solid history of on time payments with your company, there’s a chance they’ll do it.
Keep in mind that no matter how you go into debt, or what type of debt you are in, know that there is a way out. Don’t expect it to be immediately, but it will happen. All you have to do is create your strategies and stick to them.