It’s estimated that about a third of all Americans have some kind of debt that has already gone to into collections. It’s never too late to pay off your debt. Although sometimes medical bills, credit card charges, and student loans can seem like an insurmountable amount of debt. How are you ever going to get out of debt? With these 8 ways, and a bit of hard work you can rid yourself of debt quickly. Here’s how:
Organize From Greatest to Least Debt
This is commonly called the “stack method” where you take all your credit card debt, and figure out which is the highest going down to the lowest taking into account finance charges. The ones with the higher finance charges are the ones you want to tackle first. Plus if you are able to, transfer the higher interest rate debt to a lower interest rate account. The less fees you have to pay, the better. Then you can work out a timeline to pay off the debt. The most important part of this process is that you must not create any more debt. Vow to not use your credit cards anymore. Do whatever it takes, but you must stop racking up charges for this method to succeed.
Call Your Creditors
All you have to do is get on the phone with your creditors, and find out if they can lower your interest rates for you. Sometimes they will, and sometimes they won’t. It’s worth a shot. You can also ask for a lump sum payment that will get rid of some of your interest rate charges. They aren’t always willing to work with you, but if you are honest with them about how you are drowning in debt they may be able to help.
Don’t Just Pay the Minimum
While it’s tempting to just pay the absolute minimum of what you owe every month, don’t do that. You’ll never pay down your debt if you are solely paying the minimum amount. That’s how they keep you on the hook to the creditors for an excessively long time. So do your budget, and figure out how much extra you can afford to pay every month. Doubling the amount is best, but if you are unable to do that at least try to add an extra quarter amount to what you are paying. You’ll be debt free much faster.
Debt Consolidation Loans
You might be able to qualify through your bank or financial institution for a debt consolidation loan. This is where you will get a special type of loan to pay off your existing debt that has a lower interest rate that is more manageable than some of your higher interest rate credit cards. Then you pay off all your high interest cards, and only then have your low interest rate loan to pay each month. Usually it’s a much lower payment overall that you are making each month paying off multiple accounts.
Evaluate Your Tax Qualifications
When you do your taxes every year, make sure you are getting all the tax breaks and qualifications that you can get. You may need a tax expert to help you figure it all out, but the goal is to get you a bigger refund each year. That way you can take the extra refund money to pay down some of your debt.
Up Your Automated Payments
Some credit that you are paying down has been set up to come out of your checking account automatically that sometimes you might forget how you have it set up. Make sure you aren’t just paying the minimum through this method as well. Set it up to take out bigger monthly debt payments so that you pay it down much faster. Plus you probably won’t even miss the extra that is coming out of your account.
Find Extra Ways To Make Money
This can be accomplished in a number of ways. You can get a part time job on the weekends. Or start an Ebay or Etsy selling business. Don’t forget about the old summer garage sale. If you have gobs of credit card debt than you probably have stuff around your home that you don’t need anymore. Putting together a quality garage sale can actually make you a significant amount of cash. Get your family involved as well. Everyone can benefit from helping out even young children can go through their toys to find out what they don’t’ play with anymore, and might want to sell at the sale. Make it fun, and you might make a pretty penny doing it.
Don’t Get Overwhelmed
Focus on one large debt at a time. If paying down all your debt is too much to handle, then finding the largest one with the biggest interest rate is the one you want to conquer first. You can do this, by following all the tips given you might be able to get a grip on your debt faster than you might think.