Did you know that the typical person is spending $329 more each year than the amount of income they bring home? With this kind of spending, it’s hard to avoid financial challenges like credit card debt. But with the right mentality and a plan, you can relieve debt and get your finances in better shape.
Read on to learn 5 solid tips on how to get out of debt fast!
1. Create a Budget Chart
Do you use a budget to guide your spending habits? If not, creating a budget spreadsheet or using a budget app is a must.
Start by determining your monthly payments for expenses like rent, food, utilities, and student loans. Then subtract those ongoing expenses from your monthly income. This will tell you how much money you can put toward paying off debts or saving for retirement.
2. Make Payments Above the Minimum
While it might be tempting to make the minimum payment on your credit card, don’t do it. Pay as much as you can!
Credit card interest rates can exceed 20%, meaning that you’ll be paying a lot more than what you initially owed. By paying as much as possible, you can get yourself out of debt more easily.
3. Look into Refinancing to Relieve Debt
Are you paying a car loan or mortgage? You might be able to refinance these payments to get a lower interest rate. For instance, you could drop from a 5% interest rate to 4% on a car payment if you are in good standing.
If you’re dealing with mounting credit card debt, call the company and ask for a lower interest rate. As long as you’ve been diligent about paying, the company probably will budge to retain your business.
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4. Try Negotiating Lower Payments
It never hurts to take a stab at the art of negotiation. You might just be able to negotiate lower monthly payments on recurring costs, like an internet or delivery service. If you’ve been a loyal client, you’ll have a strong foundation to make your case.
When negotiating, use the phone or do it in person. You may be able to lower the payment on a medical bill, insurance cost, or phone bill payment.
5. Take on Another Job
Another way to make progress toward debt relief is through an additional job. Take on a side hustle selling items you don’t use online. Or become a dog walker or babysitter in your neighborhood.
Yes, you’ll have to commit time beyond your normal work day. But the extra income can put you on the track to quick debt relief!
Learn How to Get Out of Debt Fast
When you know how to get out of debt fast, you can keep your finances under control. Start by making a budget, and aim to put more money toward credit card payments than just the minimum. Look into adding a side hustle, and work on renegotiating loan payments and interest rates.
Need more financial tips to get your life back on track? Check back soon for new and informative articles.
