Whatever circumstances led you into debt, getting out of it will not be easy. If you could just make your mind and pay off everything in an instant, then you wouldn’t be in debt in the first place. You need dedication and sheer willpower to pull it off successfully, but it will be all worth the effort in the end.
One thing to understand is that getting out of debt is even more difficult when you don’t have a method to it. You could have mountains of dedication and the will to do everything, but if you lack a strategy, you aren’t going to get very far.
You need to approach this problem in an organized manner to see any tangible improvement in your situation. These are the tips that you should follow to get a step closer to being debt-free:
Don’t just pay the minimum
This is a pit that a lot of people fall into. They pay the bare minimum required and end up paying way more than the original debt was. If you want to get out of this debt, pay more. If you can afford it, double the monthly payment. A good strategy is to delegate at least ten to fifteen percent of your monthly income for paying off debt.
Save smartly
Saving your money and using it to pay off debt or avoid getting into more debt is really important. But it is just like dieting. If you suddenly stopped eating your favorite food because it’s not healthy, you will not succeed. You will eventually give up on the craving and eat a lot more than you usually would.
Similarly, a cup of coffee isn’t going to prevent you from clearing your debts. So instead of blocking all expenses, eliminate larger, less necessary ones. For example, your phone can most likely work just fine for another year; avoid spending money on a new expensive one until you’re out of debt.
Go from largest to smallest
When starting the debt pay-off journey, tackle the biggest beast first. Of course, you can’t just stop paying installments from all of your debt to pay for one. Instead, just pay the bare minimum for all of them, except the one with the largest monthly interest rate.
Focus all of your efforts on paying that one as quickly as possible. Once that is cleared, move on to the one with the second-highest interest rate, and so on. You’ll start seeing a quick positive change in your debt situation by adopting this strategy.
Work more
This might sound cliché to many, as everyone has heard, “if you want to succeed, work harder,” but it is true in this case. If your health allows it, and you’ve got the time, get a second job. Maybe work extra hours at your current job.
Maximize the amount of money you can earn on any given day and use that extra cash to boost your debt-paying efforts. Just make sure that you don’t burn yourself out, and this strategy will surely work.