3 powerful tips to get rid of debt fast
Is debt becoming your worst enemy? Is it keeping you from moving to the next level? Too much debt can be stressful. The worst part about debt is that it often takes away your future income. Sometimes people find themselves in a debt trap. They get debt on top of debt. They get a loan to pay off another loan. This can be dangerous. Such scenarios often happen when people get debt for the wrong reasons. Getting debt to maintain a flashy lifestyle can be bad. Most people get debt for consumption or to buy luxury vehicles to keep up with the often perceived levels their neighbour have reached.
Paying off your debt requires strategy, commitment, discipline and persistence.
Create a list of all your debt
Most people are often afraid of knowing how much they owe in total. Do yourself a favor by creating a simple list of all your creditors or loan providers. Open up an excel sheet and list all your creditors or loan providers. State the loan balance and interest rate. Sum up the total loan balance. This will give you an indication of your total debt position. The advantage of doing this is to help you assess whether consolidating your debt is a good idea. You would then identify one loan provider that offers loans at the lowest interest rates and subsequently get a loan from them to pay off all your high interest loan providers. This results in you having one loan provider to deal with and settle. Debts with high interest rates should be debt with first. Ensure that you clear these as soon as possible and stop using credit cards. Clear your bank overdrafts.
The first thing you need to do is assess your lifestyle. Are there any expenses you can cut off? If you can reduce your expenses, you can create some room to increase your loan repayment amounts. Cutting your spending will essentially allow you to pay off your loans much faster than if you continued on your extravagant lifestyle path. Get into the habit of creating a budget before spending any income that you get. Have a plan for your weekly or monthly income and spend your money as per your budget. Another thing you can consider doing is compare your actual expenses to your budgeted expense amounts and subsequently analyse the variances. This will give you an idea of where you are going wrong with your money.
Increase your income
There are a number of ways you can increase your income. The only challenge is that increasing your income often involves investing money and it is difficult to invest when you are in debt. The best thing to do if you are employed or have a business is to work hard. Work hard and get a promotion if you are an employee. Work hard and grow your business if you are an entrepreneur. Consider taking on some freelance jobs online or some casual work.