When you lie awake at night worrying about your debts and the bills you’ve got to pay, it’s time to do something about it. Many of you won’t have found yourself in debt intentionally. The problem is it’s so easy to do. An increasing number of people are regularly spending more than they earn and bridging the gap by borrowing money.
While this might be a fix in the short term, in the long term, it only makes things worse. Burying your head in the sand is not the answer. Confront your circumstances head-on and follow these tips.
- Pay More Than the Minimum Amount
If you opt for paying the minimum amount on your credit card bills it’ll take you years to pay off the debt. One of the best ways to pay off your personal loans, student loans or credit card debt is to make more than the minimum monthly payment.
As well as speeding up the payoff process you’ll also be saving on the interest.
- Stop Using Your Cards
This might seem an obvious solution, but you’d be surprised how few people actually consider it. If impulse buying is your problem put your cards away and never take them shopping with you.
Better still, cut them up and promise yourself you’ll never buy anything on credit ever again. If you can handle having a credit card and are able to act responsibly, there are actually advantages to having one. You should also bear in mind that closing a credit card account can have an adverse effect on your credit score especially if the accounts are older and the credit limits are high.
It’s a wise move to keep these accounts open and just hide the cards. Bring them out every now and again to buy a small item but pay the balance in full when it’s due.
- Avoid Interest Charges with a PIF card
A PIF or pay in full credit card is one you can use for normal purchases. Interest charges are avoided because you pay the balance on your card every month.
If you don’t use your card in this way and always leave a balance on it, you’re paying interest on your purchases from the day they’re made. The savings you make on interest charges can be used to pay down more of your other debts.
- Find a Side Hustle
Finding a way to earn more money is going to speed up the payoff process even further. Almost every one of you reading this is going to have a skill or talent that can be put to good use.
It could be cleaning houses, babysitting, gardening, or helping kids with extra tuition.
- Pare Your Budget Down to the Bare Bones
Cutting your outgoings is going to help you pay down your debt faster. Make a list of all your expenses and cancel things you don’t really need. For example, do you really need to subscribe to Netflix?
Isn’t there something more productive you could do with your time rather than binge-watch the latest series? Once your spending is back on track, you’ll be able to start adding some of these expenses back again.
- Sell Things You Don’t Need
One way to get some cash quick is to sell off some of your belongings. We’ve all got stuff lying around that we rarely use or need. Sell some of these unused items and use the funds to help repay your debts.
- Contact a Debt Relief Company
A debt relief company negotiates with your creditors to renegotiate, settle, or change the amount you owe.
What usually happens is you pay a lump sum, and the debt will be considered settled. There are both advantages and disadvantages to this particular option, and a company such as Crediful is able to offer you advice.
- Negotiate Lower Rates
It is possible to do the negotiating yourself and asking for a lower interest rate is quite common.
You’re more likely to get your credit card provider to agree if you have a good history of paying your bills on time. Several other different bills can also be eliminated or negotiated down in the same way.
- Drop Those Expensive Habits
If you regularly find yourself short every month, it’s time to change your lifestyle to match your income and drop some of those expensive habits you’ve got.
Evaluating your spending is a good idea because it makes you look closely at your expenditure and realize where you can make big savings.
Whatever type of debt you’re in, it’s important that you face the reality of your situation and appreciate there is a way out.