If you’ve found yourself in a large amount of debt, you probably stress that you’ll never be able to escape it. Being in debt can be debilitating – it can prevent you from advancing in life. If you don’t manage to escape debt, you may never be able to improve your financial status or invest in opportunities that present themselves. But you don’t have to stay in debt forever, there are actually plenty of ways that you can begin taking back control of your financial situation. You need to start by making a firm decision to escape debt as quickly as possible. You won’t be able to improve your situation unless you admit there is a problem. This guide has been created to help our readers better understand ways to escape their debt problems. We have compiled eight tips for helping you escape debt quickly. It’s important that you consider each tip and how it may be applicable to your situation – reducing your debt requires a comprehensive approach to the process!
The first thing that you should do is set goals. Setting goals is one of the easiest ways to start yourself on the right track. If you don’t have defined goals, it’s hard to work towards something. You should set a date for when you will try and be out of debt – or set an amount of debt that you would like to pay off each month. This is typically the easiest way to visualize yourself debt-free. Assess the different types of debt that you have. Your goals will depend on the types of debt and interest rates that you’re working with.
Second Income Stream
If your current amount of income is unable to realistically pay off your debt, you may want to consider a second income stream. If you have a particular skill, consider going into freelancing to help pay off some of your debt. Many people end up setting up small businesses on the side to supplement their income – head online and check out what small business owners are doing for side hustles at the moment. This is a great way to help alleviate some of the financial stress you may be feeling. Even an extra few hundred dollars a month can go a long way in helping you escape your debt.
Cut Down on Subscription Services
With so many subscription services on offer, many of us don’t even realize we’re paying monthly service fees for things we don’t use. Make sure to look at your bank statements for any subscription services you may be using – you can then cancel services you don’t use. You can also search for better deals for services you do use – many people are overpaying for their internet and television services. Look for a better deal!
Consolidating your debt is one of the easiest ways to start reducing your debt. Many people pay high interest rates to credit card companies and loan sharks. If you get a consolidation loan to pay off all your debt, you can refinance all your current liability into a single payment at a much lower rate. Not only does this reduce the complications with your current problem, it also means that you’ll pay back your debt with less interest on top. Consolidating credit card debt into a single term loan gives you a much better sense of when you’ll be able to escape debt permanently. It provides you with a set timeline that is predictable and achievable – it’s the perfect way to increase your chances of sticking to your goals. Use a debt repayment calculator to see how long its going to take with or without a loan.
Cancel High-Interest Credit Cards
If you have credit cards that have extremely high interest rates on them, consider cancelling them after you consolidate your debt. You don’t want to be tempted to accumulate more debt at a high rate! Using revolving credit makes it very tempting to continue spending on your credit cards, it’s best if you eliminate the temptation altogether. If you find that most of your debt comes from credit card spending, it’s time to do away with the option. Consider credit card consolidation companies to help bring down your interest rates.
Make Extra Payments
Making extra payments when you can afford to is one of the best ways to speed up the debt reduction process. When you make extra payments, you reduce your balance and the interest that you owe. You’ll be able to pay off your future debt much quicker if you make extra payments early on.
Set a Budget
At the end of the day, most debt comes from poor budgeting. When you decide you’re going to start paying off your debt, you need to sit down and organize a budget for the month. No matter what you do, you need to stick to your budget as much as possible. Make sure that you realize how important it is to not make any exceptions – once you make on exception, you’ll make a million!
Use Money Saving Apps
Technology has allowed many borrowers to improve the way that they save money. Money saving apps can analyze your accounts and help you pinpoint areas where you can do better. Some will also provide you with automated saving mechanisms that withdraw certain amounts of money from your account. There are tons of different ways you can use money saving apps to improve your saving habits. Check out DCL’s best money saving apps if you’d like to see which apps are leading the industry.
There’s no better feeling that finally being debt-free. Once you decide to start reducing your debt, you need to make sure to stick to your commitments – you don’t want to fall back into the same bad habits. Reducing your debt is all about creating a strategy and implementing it. If you want more advice on getting a loan to pay off debt or some of the other tips mentioned in this article, check out some of our other content. We have tons of articles that provide in-depth analysis of certain strategies and options – we’re the number one resource on the net for these types of topics!
Financial Advisor, MoneyBeagle
Dan is one of the top financial experts when it comes to debt consolidation. With more than 20 years of experience helping people tackle debt, he has a unique insight when it comes to solving debt-related problems.
Dan got his start when he went to work for a bank after getting his Business Degree. He worked his way up and became a loan officer. This position gave him unique insights into the ways that financial products work and how people can utilize different financial products to improve their lives. He’s seen hundreds of success stories and just as many failures – so he knows what steps are most likely to help his readers.
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