Drowning in debt can take all the joy out of life, and that’s no joke. While you might have a nice vehicle, a beautiful lawn, and a garden-style home and a college degree to go with, underneath it all, you might resent every bit of it.
While you might have a nice vehicle, a beautiful lawn, and a garden-style home and a college degree to go with, underneath it all, you might resent every bit of it.
Steps to Take if You’re in Debt
The truth is, you don’t own all of these things you’re still making payments on, they own you. I’m not here to preach, just to help you find a solution that works. These are some steps that you can take to be free from all the debt you may have collected over poor decisions over the years.
Don’t Take On Any More Debt
Getting out of debt won’t happen if you keep using that credit card. So, stop taking on any more debt. Find interesting and sick-demented ways of killing that card and then holding a funeral for it if you have to.
List ALL of Your Debts
It can seem overwhelming and unclear if you don’t have all your debts written down on a list. List them from A to Z.
Pay Off Higher APR First
Interest rates can be ridiculous, and cause monthly payments to extend much longer on things. Pay off the higher interest rates first and then worry about principles that have little to no interest.
Attack the Smaller Debts
Dave Ramsey discusses the “snowball effect”, by paying off smaller chunks of debt first and make only the minimum payments on the larger expenses. You will soon gain momentum when smaller debts are paid off, then take more money to pay off the next obstacle in your path, creating a larger snowball that gains momentum.
Find Lower Interest Rates
Consider finding a credit card that has a lower interest rate. Many introductory rates are set at 0% for new members so that you can pay off bigger chunks of debt quicker. Your bank is another option for going after lower interest rates.
Is there anything of value that you can part ways with? If you have a car that you’re making $500 monthly payments on, think of all the money that could be going towards getting you out of debt faster. That’s $6,000 a year you could have used elsewhere.
Stop Going Out to Eat
This is a big one and a big money waster. Stop going out to eat! Every time you head out for a meal at a sit down restaurant, you’re looking at dropping another $50 in the trash. Stay at home and stick to meal-planning by making a grocery list before you head to the store.
We shop at Aldi and use this ultimate cheat sheet for saving money at Aldi to bring our grocery bill down. I love their options for things like frozen pizza. We can feel like it is a splurge for under $5!
Take on Side Gigs
Do you have a hobby that can earn you some cash? Maybe you enjoy setting up a sound system for local bands or enjoy throwing an occasional garage sale. You might even want to consider taking on a part-time job that you enjoy, to help with your finances.
Stick to a Budget
It’s going to be hard if you’ve lived a life of splurging and entertainment. All of this is going to have to stop. At least until you’re out of debt. Stick to a budget, and don’t spend any money outside of that.
These are several simple steps for you to take to help you when you’re drowning in debt. If you’ve struggled with debt in the past, what other steps were helpful to get you debt-free faster?
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