The truth is there is no an easy way how to get out of debt. It’s a vicious circle that most of us fall into When taking out a bank loan, we are mainly focused on our investment without thinking about the way how to get out of it afterward. We quickly get exhausted chasing our own tail and feel like there isn’t anything more we can do to become debt-free. Depending on how big the loan is, it can stick with us for a long time, even decades before we reach our financial freedom. To make things even worse, we are obliged to pay off our debt no matter what our circumstances are, whether we are experiencing some difficult life moments or we have some unexpected expenses still need to pay off our debt.
That’s why its important for you to learn how to get out of debt as soon as possible and focus on earning more money instead of making no progress whatsoever. We have rounded up 5 ways you can free yourself from getting rid of your biggest enemy – the debt.
Decide what to pay first
Once you know exactly how big your debt is, your next step is to develop a plan that will allow you to find the easiest and the quickest way to pay off your debt. Prioritise which of your debts you are going to pay off first, and then come up with a plan of an attack. With some loans like a student loan, paying the minimum, even $20 dollars month can significantly save you huge amounts of money in the long run. Calculate your savings using the calculator, or use a snowball method. In a snowball method, you take all your debt, you pay off the minimums on everything except for the smallest balance. This lets you make incremental progress and knock down debt after debt after debt.
Cut down on extra money spending
There are a few ways you can do this:
Start couponing – You can literally save tons of money just by using coupons for the products you are buying
Cut cable- The digital age has given us the opportunity to watch our favorite shows online, so we don’t have to necessarily use the cable. Cut your cable and save up to $100 each month
Stop going on shopping sprees- although everyone needs new things and new gadgets once, in a while, you need to learn how to stop wasting money on the things you don’t really need.
Plan your grocery trips – Before going on a grocery trip, make a plan of all the necessities and stick to it. Once you start spending money on the things you don’t urgently need, you have problem
Take out a consolidation loan
Although many may think that taking another loan to pay off the current one is meaningless, it actually makes a lot of sense. When you take out a consolidation loan, you actually borrow enough money from a lender to pay off all your debts at once. So, instead of you have only one creditor to worry about and keep a track of a single monthly payment instead of multiple payments to various creditors. It lets you free yourself from the stress and keeps your life more organized. On top of that, it reduces the portion of your income that goes towards paying off your debt each months allowing you r+to save more money instead of wasting it each month.
Stop borrowing money
When trying to find the easiest road to financial freedom,most people fall into a common trap of borrowing money form their friends, relatives or even signing up for more credit cards. If you continue creating new debts, you will easily lose track and make no progress. You don’t want to owe more money to different people and different lenders at the same time. Instead of borrowing money, focus on making some more money or even selling some o your belongings. Stp even considering the option of financing new furniture or new cars you don’t have the money to pay for. Be realistic about your finances and stop asking for more trouble.
Set a realistic budget and stick to it
Create a budget to find out if you have any money that is left over ( which is called surplus), or you are in deficit. Your ultimate aim here is to increase your surplus. You can do this in two ways:
Earn some more extra money – consider looking for another part-time job that will give you enough financial income. There is a wide range of online jobs you can do nowadays that don’t require particular time investment and can be a good source of money on a monthly basis.
Cut down on additional expenses – you need to set your priorities and be realistic about the financial situation you are in, You are no longer in a position to spend an excessive amount of money on luxuries or unnecessary amenities in life. You need to become committed to your goal and stick to it.