Getting out of debt is something that can seem like an impossible task. However, we have good news for you. The first thing that you will need to get out of debt is motivation. If you take the courage to deal with such a huge problem, you will only need to find the financial strategies that will help you achieve your goal. We wanted to inspire you and help you, so we prepared 7 proven ways that you can try on your journey of debt payoffs.
1. Consider refinancing Your Mortgage
If you are the owner of your house, you have the right to consolidate all of your debts into one mortgage. You need to see whether you have enough equity in your home because if you do not have it, additional mortgage insurance costs can be very expensive. Therefore, you should contact someone professional in this field and seek advice.
In case a bank or credit union can not help you do not make the mistake of rushing into a first home equity finance company that wants to give you money. A better option is to collaborate with an accredited and non-profit credit counselor. You can be surprised when you hear that counselor can suggest to you some other option than refinancing your home.
Additionally, the counselor will help you to choose the best financial strategy for your situation and accomplish your financial goals. In case you can refinance your home and consolidate your debts into the mortgage, you should also pay attention to keeping your spending under your income. In other words, you should set your budget and try to save money.
2. You can get a Consolidation Loan
As we mentioned earlier, you have the option to check with your bank or credit union whether they can help you consolidate all of your debts into one loan. Logically, that loan will come with one payment at a lower interest rate. This option is very beneficial for getting your debts paid off.
However, you need to make sure to create a certain budget after getting debt consolidation. The new budget will help you from creating new debts while you are paying the current ones and it will allow you to save some amount of money every month. We understand that no one who is in debt thinks about savings.
However, if you do not save money, you will use all your credit cards again at some point and end up with more debts. As the result, you will be even at an even worst place than you have been primarily.
Therefore, while you are paying your loan, you need to find the problem of why are you spending more money than you earn. Therefore, keep your spending under control and try saving even a bit of money every month for emergencies or unplanned expenses that can potentially occur.
3. Get an online payday loan
As we said, one of the easiest ways to pay off all of your debts is getting a loan. However, things get much easier if you can do it online and immediately. You can choose the amount of money you want to borrow and then complete the entire procedure of getting that money online. Best of all is that the whole procedure is secured and protected since they are using a top-level encryption system.
Therefore, non of your personal information will be used without your knowledge. Also, there are no hidden fees. What you see on the agreement, the amount of money you will pay later when you are ready. If you want to find more about this option, you can check the GoDay platform.
4. Start tracking Your Spending
People are not even aware of the fact that they can save a lot of money if they start tracking the money they spend. In fact, they can save almost the same amount of money as they would earn with a new part-time job. Once you figure out your spending habits, you should be able to identify fields where you are spending so much money and cut them. For instance, maybe you are paying monthly memberships for some activities that you do not participate in, or you are buying more things that you need.
5. Get a Second Job
If you are not a fan of getting some type of credit that can help you pay your debts, you can always consider getting a second or part-time job. Many people think that this can be so exhausting and difficult to achieve. However, you do not have to put so much effort into getting a couple of bucks more.
For instance, you can choose to pick some extra shifts a couple of times in one month. This strategy can make all of your debts go away if you decide to be persistent. Working the extra shifts or hours also doesn’t need to be permanent. Once your debts are paid off, you will have more free time again.
For instance, you can replace the time you are spending on some sport activity or hobby and work instead. If you are a good writer, you can consider writing some articles for blogs, if you are a handyman, you can sell your services. Just be creative and it will pay off your debts.
6. First Pay Off Your Most Expensive Debts
Find the one debt that comes with the highest charges and focuses primarily on paying off that one debt first. This is one of the smartest strategies that will get you out of debt quickly. When the most expensive debt is paid off, focus your money on the next most expensive debt.
After you pay off the second one, just continue this method and you will see that you will be left with your least expensive debt to pay for the end. Most of all, after the first paid off a debt you will feel motivated and inspired to continue and achieve even bigger progress.
7. Consider Paying More Than the Minimum
One more strategy that will help in the long run is paying more than your minimum payments on your credit cards. If you pay only a minimum credit card payment every month, you will need more time to pay off your balance.
In general, this is because the majority of your minimum payments will go on paying interest fees instead of reducing the money you owe. Therefore, if you want to pay off your balance quickly, you should have as much money as you can afford, even $50 for a month.