5 Ways to Get Out Of Debt Fast
Are you overwhelmed with debt? Do you often find yourself surrounded by piles of overdue bills? Do you need help getting out of debt? Below we have some tips to help you erase your debt once and for all.
Being in debt can force you to work long hours just to keep afloat. When you’re trying to pay off your debts, it’s one thing to realize that saving more and spending less is the way to becoming debt free. Of course, this is easier said than done. Saving money and paying off debt isn’t an easy task and involves a lot of work.
We’ve come up with some tips to help you tackle your debt head on and get you living debt free.
1. Acknowledge That You Need to Get Out of Debt
In order to pay off debt, first you have to realize that you’re in debt. It’s absolutely acceptable to take out personal loans, whether you need them for school, your mortgage, a car, or other emergency expenses. However, having too many debts can quickly become a problem, especially if your find yourself getting loans to pay off other loans. Never borrow more than what you know you can pay back, and do your research when it comes to personal loans. Know which loan works best for your situation and which loans you’ll be able to handle.
2. Stop Creating New Debt And Repay Debt That Already Exists
Unfortunately, high school doesn’t offer a class on how we should handle our money, which is a shame because most of us could use a lesson or two! It’s tempting to max out credit cards, but remind yourself what will happen if you can’t repay debt on that credit card. If you don’t know how to control your spending, it’s easy to fall down the rabbit hole of debt. Unpaid debt can cause some severe problems in your future, and bad credit will follow you for years to come. If you have unpaid debts, you may find it difficult to buy a house, a car, or apply for personal loans or credit cards. As hard as it is, sometimes you’ll have to bite the reality bullet and prioritize your financial status so you only spend what is necessary. This may mean giving up some luxuries that aren’t affordable within your current income.
3. Create a Budget to Control Your Spending and Get Out Of Debt
Create a worksheet (try an Excel doc, or using the free worksheets on Google Drive!) where you can track your income and your expenses. Make sure your expenses amount to less than your income. Track your expenses from most important to least important so you’ll know what you have to spend money on (for example rent and groceries) and what you want to spend money on (such as expensive cable packages, or the newest model phone).
Take into consideration that the smaller the amount is, the easier it is to pay it off. Pay attention to interest rates of your bills, as you’ll want to prioritize paying off expenses with higher interest rates first to avoid spending more money than needed. Remember, you can splurge every once in a while! All that saving deserves a little treat. Just remember what your end goal is, which is paying off your debt.
4. Getting Out of Debt Involves Creating A Repayment Schedule
Exactly how long does it take to repay debt? The answer will vary for each individual as it depends on how much you can afford to pay off. Keep yourself on top of your payments, and cover at least the minimum payment on every debt you have (though ideally, you should be paying off a lot more if you want to get out of debt in a timely manner!). Mark the dates your bills are due and how much you owe on your calendar (having a physical calendar on your desk or workspace can help) so you’ll have a regular monthly reminder.
If you don’t think you’ll be able to keep yourself accountable, find a debt buddy who you can count on. Whether this is a parent, a sibling, a co-worker or a good friend, it’s their job to remind you to stick to your budget, and encourage you when times get tough.
5. Reward Your Progress Getting Out Of Debt
All work and no play can make anyone go crazy, which is what’ll happen if you’re too tough yourself. Yes, you want to get out of debt, but don’t make yourself miserable, cutting back on absolutely everything that you enjoy. Instead, celebrate little victories with positive reinforcement. There’s no need to buy designer shoes when one bill is paid off, but it’s fine to treat yourself to a fancy coffee or something small to reward yourself for all your hard work and dedication. You’ll feel good about your progress without breaking the bank and taking on more debt. Seeing progress should motivate you to continue what you are doing and before you know it, you’ll be out of debt!
Paying off debt takes time, motivation, and dedication. Anyone can do it, you just have to be consistent and goal driven. The process of how to get out of debt is different for everyone, so find a plan that works for you!
If you need to consolidate your loans, a personal loan at Magical Credit may be beneficial. Let us help you find a loan that’s practical for you. Contact us now.