If you’re neck deep in debt, now is the perfect time to take action to prepare a challenging and yet rewarding journey to financial freedom. Before you start this arduous task, it’s only right to equip yourself with commitment, hard work, and endless patience.
If only paying off financial obligations was as fun and easy as spending money, the world would be such a blissful place for all. But the reality bug bites, opening our eyes to bills and debts that need be paid on time, or else, well the late fees and other charges will seriously drain your savings. If you want to pay off debts faster while starting on a promising savings for the future, here are tips to follow.
Always pay more than the required minimum repayment amount
Credit card companies set a minimum amount for monthly repayments. A large chunk of those payments goes towards interest and other fees, leaving you to wonder how long must you endure paying off your credit card debt. If you want to repay you loans faster, be it a secured or unsecured loan, it’s best to pay more than the predetermined minimum repayment amount. This repayment strategy is an excellent solution when managing mortgage and car payments.
Qoins is a great app that you can use to direct small amounts of spare change from purchases towards the payment of credit card bills and other short-term loans. It promises to help uses shave off between 2 and 7 years off the length of debt repayment plans.
Use the power of extra payments and learn how extra payments can shorten your payoff time by using this insightful debt payoff guide.
Find other sources of income
It’s always a good idea to find extra sources of income. If you’re making just enough to repay debts and pay important financial obligations, it’s close to impossible to get out of a hopeless situation. If you have free time after office hours or have weekends free, why not take up a part-time job. There is no shortage of side hustles to choose from. Even those working in small cities can make money online. Find a job that complements your talents and skill set. Monetize using your talent and passion while earning money that you can allocate to grow your savings.
Job search sites like Indeed will help aid in your search for local jobs without leaving the comfort of home. If you’re ready to take hourly jobs during your free time, we also recommend checking out the job postings at Snagajob.
Create and live a simple lifestyle
A simple lifestyle that requires the use and consumption of bare necessities is one effective way of reducing your debts. Spend on needs rather than wants, including food, water, electricity, gas, and shelter. All expenditures outside of these categories are optional. Reduce unnecessary expenses such as eating out, impulsive shopping, and last-minute travels. Instead, allocate your free time with loved ones or pick a part-time job where you can generate more money for savings purposes.
To keep track of your personal finances that will help you manage your money efficiently, we recommend using apps like Mint and YNAB (You Need a Budget) These programs keep track of all transactions and showcase your pattern of spending in easy-to-understand visuals. They are fantastic to keep a close eye on your overall financial health and quickly identify problems, too.
Apply for a consolidation loan
Determine if your bank or credit union can assist in consolidating all consumer debts into a single loan with one payment assessed with a lower interest rate. If you are deemed qualified for loan consolidation, you are only a few years away from getting all your debt paid off.
A debt consolidation will only be an effective technique to financial freedom if you can create a practical budget that enables you to save money at the same time. Savings may be a less important priority, but the lack of savings may force you to reapply for more credit cards which may drown you in more debts over time.
Discuss your situation with a credit counsellor
Before filing for bankruptcy, consider speaking with a seasoned credit counsellor to look for other solutions that may save you from huge debts. An experienced credit counsellor will be useful in looking for available programs that can aid in dealing with your debts. A reputable credit counsellor will discuss all available options and help you decide the most practical and sensible option for you.
Find the best credit counsellor in your city and schedule a consultation as soon as possible. Although you will need to pay for their service, credit counsellors bring forth valuable insights and solutions that make their assistance worthwhile.
We hope these debt management tips can help you in achieving your financial goals sooner than later. Even the little changes that you apply to your daily life are inspiring efforts that will allow you to pay off debts and save money in the long run.