Are you drowning in a sea of debts? Using debt relief programs like debt consolidation and debt settlement can come to your rescue. Apart from this, you can also work to reduce your debts using the following techniques:
Save up for emergency
Before you begin to pay off your debts, save up enough funds for unexpected expenses such as medical bills and car or house repair. This way, if any of these unfortunate circumstances happen, you don’t need to steer away from your debt repayment plans.
Organize your debts
List down all the debts that you are currently paying for. Start with the one with the lowest interest rate until you get to the one with the highest interest rate. Compute the total amount of your debt. Prioritize paying the ones with the highest interest rates.
Make minimum monthly payments
Make it a point to pay all your debts at least the minimum amount to avoid penalties and higher interest rates. This is so you can avoid getting buried deeper into your debts. When paying credit card balances, it would be best to pay on the card’s closing date instead of the payment deadline. If you do this, the transaction that you make after the closing date will appear on the following month’s statement. Payments are easier to track this way.
Avoid unnecessary expenses
You can’t get rid of your debts if you don’t make certain changes in your lavish lifestyle. For you to have the money to pay off your debts, you need to organize a budget and reduce your expenses. List down all the money that comes in and goes out. See which expenses you can cut down. It’d be a good idea to use online tools for budgeting your income. Or if you prefer to do it the traditional way, try using the envelope method for managing your money and keeping expenses under control.
Increase your income
Apart from cutting down on expenses, it’s also a must to increase your income. Get a second job or a part time job. Try using your spare time to work online. You can also try to sell items around the house that you no longer need. This is always a good source of extra income. Hold a garage sale in your home or put up an online store. Welcome any extra income that comes to you.
Look at your credit card debts. If the interest rates are too high, you can transfer your balances to a new card with a lower interest rate. This will help make it easier for you to reduce your debt and get rid of it once and for all.
Although it’s not possible to get rid of all your debts overnight (unless you win in the lottery or inherit a big amount of money), you can definitely lighten up your load slowly but surely with the tips mentioned in this article.