Get Out Of Debt Fast
GET ORGANIZED
This is one of the most important tips for getting out of debt. You can’t pay your bills if you don’t know where to start or what you have. Write everything down. Get online and go the national student loan website if you have student loans, where you can find every single loan, what companies they are with, and how much you owe. Once again, write it down. Write down all your debt or put it in a spreadsheet on your computer. This is important to give you a reality check and help you see what you have in front of you. Don’t plan yet, just write it down. Also write down the income that you earn. Every dollar made should be accounted for then write down every penny spent. I don't care if it's a 75 cent candy bar bought at the vending machine. WRITE IT DOWN! This may seem tedious and stupid but it gives you a great idea of where your money goes and it can help you figure out ways to cut back or control your spending.
NO CREDIT CARDS
Credit cards are dangerous. Why are credit cards dangerous? For a few reasons: first, they make it easier to spend money that you don’t have. Research has shown that we feel more pain when we spend actual dollars than when we swipe a credit card to pay for a purchase. In other words, the credit card actually removes the discomfort of seeing hard-earned money leave your wallet. That’s why it can be so easy to get caught up in credit card debt. Another potential problem with credit cards is minimum payments — which can keep you in debt for a very long time. Many people simply make those minimum payments while their balance barely shrinks (or perhaps continues to grow) because of further spending and interest charges. In fact, the third reason credit cards are dangerous is the interest. Some cards have high interest rates — up to 25 or 30 percent. Even if you have a lower interest rate, like 10%, that still means you’re losing money every month when you carry a balance. The interest can accumulate very quickly, which can also keep you in debt for a long time if you’re not careful. The best thing to do is cut your cards up and throw them away. Using only debit cards or checks as payment methods will ensure you never buy more than you can afford. If you must keep a credit card, I would suggest leaving it home in a safe place and using it only for emergencies. Living within your means is never easy, but it’s one step closer to living debt-free.
Credit cards are dangerous. Why are credit cards dangerous? For a few reasons: first, they make it easier to spend money that you don’t have. Research has shown that we feel more pain when we spend actual dollars than when we swipe a credit card to pay for a purchase. In other words, the credit card actually removes the discomfort of seeing hard-earned money leave your wallet. That’s why it can be so easy to get caught up in credit card debt. Another potential problem with credit cards is minimum payments — which can keep you in debt for a very long time. Many people simply make those minimum payments while their balance barely shrinks (or perhaps continues to grow) because of further spending and interest charges. In fact, the third reason credit cards are dangerous is the interest. Some cards have high interest rates — up to 25 or 30 percent. Even if you have a lower interest rate, like 10%, that still means you’re losing money every month when you carry a balance. The interest can accumulate very quickly, which can also keep you in debt for a long time if you’re not careful. The best thing to do is cut your cards up and throw them away. Using only debit cards or checks as payment methods will ensure you never buy more than you can afford. If you must keep a credit card, I would suggest leaving it home in a safe place and using it only for emergencies. Living within your means is never easy, but it’s one step closer to living debt-free.
CASH ONLY
Carry only cash with you. Here’s a rule that helps you get out of debt, and have savings left over. When you receive your paycheck, withdraw only the amount of money you need to buy groceries and gas. The rest of the money from your paycheck should go towards bills and debt.This tip keeps you from overspending, and gets you out of debt quickly. Leave your debit card at home. Although debit cards are not a poor method of spending money, if you have cash, you can easily limit what you spend. When cash is gone, it’s gone. And it’s always harder seeing your hard-earned cash go as opposed to the swipe of a card. You will be more conscious of what you are spending when you employ this trick. The less you spend, the more you have to put towards paying off your debts.
THE “SNOWBALL” METHOD??
Carry only cash with you. Here’s a rule that helps you get out of debt, and have savings left over. When you receive your paycheck, withdraw only the amount of money you need to buy groceries and gas. The rest of the money from your paycheck should go towards bills and debt.This tip keeps you from overspending, and gets you out of debt quickly. Leave your debit card at home. Although debit cards are not a poor method of spending money, if you have cash, you can easily limit what you spend. When cash is gone, it’s gone. And it’s always harder seeing your hard-earned cash go as opposed to the swipe of a card. You will be more conscious of what you are spending when you employ this trick. The less you spend, the more you have to put towards paying off your debts.
THE “SNOWBALL” METHOD??
If you've never heard of Dave Ramsey then you won’t know about the snowball effect. In Dave Ramsey’s materials, he teaches that in order to get rid of debt, you must “snowball” it. Start with your smallest debt. While paying the minimum payment on all other debts, pay large sums toward your smallest debt until it’s paid off. Then continue on to your next debt until all your debt is gone. This method is quite effective and works well. Ramsey’s “snowball” method eliminates the total number of different debts faster, but in fact it is also likely to result in paying more in interest over the duration of the debt reduction plan. So the smarter approach, then, is to first pay off the debt with the highest interest rate, right? Actually, wrong. In light of the results of a new academic study, science has weighed in on the issue, and it turns out Ramsey is right. People who pay off the smallest debt first are more likely to be successful at eliminating all of their outstanding balances. Huh?
This isn't really logical. It make more sense, mathematically, to target your debts in descending APR order. But people aren't logical. The two researchers, David Gal and Blake McShane, studied the records of thousands of people who participated in credit-card debt settlement programs and took a look at the results of their efforts to become debt-free. The study compared people who used the “snowball approach” recommended by Ramsey and others with those who took the “rational approach” of first paying off the cards with the highest interest rates. Consumers who utilized the less rational “snowball” method were more likely to actually eliminate credit-card debt.
To Ramsey and others, it doesn't matter if a debt-payment strategy is entirely rational or not. What matters is if it works. “What I have learned is that personal finance is 20% head knowledge and 80% behavior,” Ramsey explains on his website. “You need some quick wins in order to stay pumped enough to get out of debt completely.”
Motivation ebbs and flows throughout the process of striving for any accomplishment. Snagging a small victory by completing any distinct portion of your overall goal (in this case, paying off individual debts) acts as a sort of motivational boost. It gives us proof that our efforts are paying off, and instills confidence that we can accomplish what we've set out to do.
PRIORITIZE YOUR NECESSITIES = DOWNGRADE IF NECESSARY
Many people don’t like this tip for getting out of debt fast, but it’s a champion when you use it. In order to pay off large chunks of debt, you must have money, right? Well, get more money by downgrading. Which is more important to you, having gas in your car or getting your nails done? Putting food on your table or buying a new outfit? If you're drowning in debt, you may have to make decisions to cut off your cable or internet until you get caught up on your bills. Can't live without the internet? Cancel cable and pay $8 a month for Netflix instead of $100 plus a month for cable and internet. Instead of going to the club or bars every weekend cut it down to going out once a month. It can be done, you just have to do it. Say it with me. I can do this.
STOP SPENDING = AVOID LITTLE LUXURIES & IMPULSE PURCHASES
Want to know the simplest way to get out of debt fast? Here it is: stop spending. Many times, our “wants” get confused with our needs. You may have to learn the hard way, but please, take my advice and spare yourself. When you have to wait until payday to buy toilet paper, you may start regretting the boots you bought last week. Do you like to get your nails done often? Do you eat out for lunch daily? Are you in the habit of picking up drinks and candy every time you stop for gas? If you can cut out little luxuries like these, it’s money saved that can go towards your debt. Reward yourself once or twice a month, but cut back on splurging on a daily basis.
MAKE LARGER PAYMENTS
I've noticed that people who are trying to get out of debt fast make the same mistake over and over. They focus on just making the minimum payments each month so they have enough money to buy other things. Then, they are left paying an even higher interest rate because they didn't pay off their debt by the deadline. make sure that you know your deadlines and interest rates. You will end up paying for items you have put on the credit card twice if you don’t watch your interest. Quit paying the minimum. For six months or so quit buying the impulse purchases or fancy crap that you don't need and put the money towards paying off debt. After paying off a vast majority of your debt feel free to reward yourself by buying something you really want but try to pay for it in cash.
I've noticed that people who are trying to get out of debt fast make the same mistake over and over. They focus on just making the minimum payments each month so they have enough money to buy other things. Then, they are left paying an even higher interest rate because they didn't pay off their debt by the deadline. make sure that you know your deadlines and interest rates. You will end up paying for items you have put on the credit card twice if you don’t watch your interest. Quit paying the minimum. For six months or so quit buying the impulse purchases or fancy crap that you don't need and put the money towards paying off debt. After paying off a vast majority of your debt feel free to reward yourself by buying something you really want but try to pay for it in cash.
CONSIDER CONSOLIDATION
If you have student loan debt or credit card debt, consider consolidation as one option. Though the interest rate can be lower, the payout over time can be longer. If you make little money per week, however, or need some time before you think you can begin paying on loans, consolidation may be a good choice for you. Many student loans, like private loans, can’t be consolidated, and not all credit cards can. However, one alternate form of consolidating credit cards is to transfer the balance of one to the card with the lowest interest rate, which will save you money over time.
If you have student loan debt or credit card debt, consider consolidation as one option. Though the interest rate can be lower, the payout over time can be longer. If you make little money per week, however, or need some time before you think you can begin paying on loans, consolidation may be a good choice for you. Many student loans, like private loans, can’t be consolidated, and not all credit cards can. However, one alternate form of consolidating credit cards is to transfer the balance of one to the card with the lowest interest rate, which will save you money over time.
PUT ANY EXTRA MONEY TOWARDS DEBT
It’s important to remember this tip if you want to pay off your debt quickly. Any time you have extra money, it should go towards paying off your bills. So tax returns, paycheck bonuses, gifts, or other extra money you come into should go into paying off debt. That way you get to your end goal of being debt-free sooner than expected.
It’s important to remember this tip if you want to pay off your debt quickly. Any time you have extra money, it should go towards paying off your bills. So tax returns, paycheck bonuses, gifts, or other extra money you come into should go into paying off debt. That way you get to your end goal of being debt-free sooner than expected.
BUDGET EFFECTIVELY
Of course, this tip applies anytime, but especially when paying off debt. Look for ways to save money in your everyday life. If you can cut out unnecessary bills or expenses that aren't vital, that’s more money towards paying off your debt. Try cutting your grocery and gas budget in half if possible. Consider doing meal preps for the week. Make a list of what you'd like to eat for the week, buy it (take advantage of items on sale and/or use coupons if available), then cook it. Yep, you read correctly. Cook the meals and store them in containers in your refrigerator not only will this allow you to eat healthier but it will save you time and money. No more excess cash spent on eating out and impulse snacks.
LOOK FOR EXTRA INCOME
My final tip for getting out of debt fast is to look for extra income on the side. Any extra money you can bring in will help get you closer to your goal. Babysitting, dog walking, selling crafts or baked goods, a second job, or a job that you can work from home will be good places to start if you already have a full time or part time job.
My final tip for getting out of debt fast is to look for extra income on the side. Any extra money you can bring in will help get you closer to your goal. Babysitting, dog walking, selling crafts or baked goods, a second job, or a job that you can work from home will be good places to start if you already have a full time or part time job.
These tips will absolutely set you on the fast track to getting out of debt fast. Remember, if you’re truly serious and committed and ready to get out of debt fast, you may have to make a few sacrifices along the way. If you are in very large amounts of debt, you may need to follow these guidelines for a few years to see your debt completely gone. Stick with it and you will see progress. Once you have learned how to get out of debt fast, keep yourself out of debt by saving up for the things you want and paying for them up front rather than using a credit card or getting a loan. What are your tips and ways to pay off debt quickly?
Live Long and Prosper =)
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