No matter how much or how little debt you may have, it can linger on your mind like an infection. To free yourself and reclaim your peace of mind, you likely want to get rid of your debt and free up your income. At Coast Tradelines, we want to help you dig yourself out of your quagmire of debt and gain control of your financial health. Here are several tips to help you pay off debt fast.
Cut Back on Your Spending
Sit down and look over your current budget. Figure out what you can cut out of your spending to lower debt, such as streaming services, mail-order services, memberships that you do not use and takeout meals. If you feel that you cannot go without some comforts, such as streaming movies and TV shows, think about less expensive (or free) alternatives, such as renting movies and TV shows from your local library. Setting up a small home gym may save you more money in the long run on gas and the long-term cost of a gym membership. You could find that online video tutorials are just as effective as hiring or working with a personal trainer. All the money you save is money that can go towards paying off debt.
Create a New Budget
Speaking of your budget, now is a good time to decide if your current budget works for you. Specifically, note all your income and current expenses. Tracking your spending and earnings helps you understand your financial resources and potential areas of improvement. While you may pay bills on time, creating a new budget may help you realize that you’re using last month’s income to pay for this month’s bills, which can create a dangerous cycle that keeps you in debt. Tweaking your budget may help you discover extra money that you can use to either lower your debt or build an emergency fund, which also helps you stay out of debt.
Stop Using Credit Cards
As much as possible, stop using credit cards. Eliminating credit card usage better ensures that you do not add more debt while trying to pay off debt. Another reason to cut out credit cards is to improve your credit score and credit report by making on-time payments each month. That said, if you use credit cards, do so wisely. Credit cards with cashback rewards can help you earn money while spending money, just make sure you pay off your balance in full each month so you do not incur interest payments. Depending on the card, you could use your cashback balance to pay for essentials like groceries or gas.
Find a Payback Strategy That Works for You
Just as there are several kinds of debt, there are also several ways to pay off debt. For instance, focusing on paying off a single debt at a time may work better for you than trying to reduce several debts at once. You can start with your smallest debt first, funneling extra income into that payment while still meeting all your other monthly minimums. Once you pay off your smallest debt, you use the funds that went toward that monthly amount and roll it over to your next-largest debt.
Alternatively, you may prefer to start with the debt that has the largest interest rate. While that may not be your smallest debt, you could find that this particular strategy works better for you. Explore your debt-paying options until you find something that sticks.
Consider a Side Job
If you have the time and resources, consider getting a side job to bring in some extra income. You can deliver groceries or packages, or you can work as an independent contractor if you have skills in writing, photography or graphic design. No matter your side hustle, get clear on your tax obligations. You do not want to learn the hard way that you bear responsibility for paying your own taxes after the IRS hits you with a massive tax bill. If you find paying your own taxes to be too much of a hassle, getting a part-time job with a traditional employer may be more to your liking.
Consider Debt Consolidation
Do you have several debts to pay off? Rather than remembering several due dates and deal with multiple interest rates, you can consolidate your debt into a single monthly payment with a single interest rate. If you feel comfortable doing so, apply for a debt consolidation loan or an interest-free balance transfer credit card. With either option, you may need a high credit score to enjoy the full benefits of the credit card or loan, so work on your credit score before consolidating debt. You do not have to feel saddled with debt a second longer than necessary. For more tips on demolishing your debt as quickly as possible, reach out to a Coast Tradelines representative today.