16 Effective Ways To Clear Off Your Debts Quickly
On average, consumer debt in the USA by the 2nd quarter of 2019 was $14+ trillion. A lot of us are struggling to steer clear of the debt trap, and there is no denying it.
When you’re in debt, it becomes difficult to maintain a consistent lifestyle. You need to cut down expenses, look for additional income opportunities, and start living according to the rules set by the debtors.
If you’re trying to get out of the debt trap, the first step is to know what exactly you owe. Calculate all of your outstanding bills. Once you have a total, you can start arranging your plan of action. This way you’ll be able to manage your income and pay off the debts in a streamlined manner.
Keep reading to find out 16 tried and tested tips from financial experts for clearing your debts quickly and easily.
- Build A Budget – You can either use an online tool or build an Excel spreadsheet with your monthly income and expenses. Once you have the necessary answers, identify the areas where you can cut costs.
- Make A Plan – Based on the list, you can either start by clearing the most-expensive debts first or pay off the smaller ones first. We recommend starting with the debts that have a higher APR. The sooner you clear them, the better your chances of being able to improve your credit score.
- Pause Credit Card Spending – Stop using your credit card for everything. The more you use it, the more your debt accumulates. Lower spending means lower monthly repayments. Moreover, if you can make these smaller payments on time, it can go a long way in impacting your credit score for the better.
- Pay More Than The Minimum Amount – You should try paying more than the minimum amount. While financial crunches can force you to make just the minimum, this just lengthens the debt period. Alternatively, you can start making weekly payments instead of monthly payments. This way the interest charged will decrease with every payment.
- Sell Off Your Unwanted Stuff – Go through the garage, basement, attic, or storage locker to sort and filter all the items that are of no use to you. You can hold a sale on your premises or list the items on Craigslist, eBay, and other similar sites for some extra cash which you can use to pay off debts.
- Pay In Cash – It is a great idea to start paying in cash for day-to-day transactions. The good thing with cash transactions is that you’ll seldom overspend.
- Start Saving – Empty the leftover cash (coins and smaller denominations) into a piggy bank or other similar storage. Make it a daily habit and you can use it every month to speed up the repayment plan.
- Cancel Unnecessary Subscriptions – If you’ve got subscriptions for apps, magazines, or other similar services that you don’t use frequently, canceling them temporarily can help you accumulate some extra cash for repayments.
- Add Bonuses Or Incentives To The Debt Payoff Fund – Use the incentives or bonuses earned at work to pay off loans and debts. Instead of spending them on a vacation or party, use them to rid yourself of debts.
- Start Eating At Home – You can indeed save a lot of money by choosing to dine at home. Regular takeaways and dinners squeeze out a lot of funds. By cooking at home, you can cut down the food expenses by more than half.
- Track The Spending – Cut back on spending as much as you can. It can be a bit difficult, but you’ll save a lot. We recommend preparing a monthly budget template to better control your spending or downloading an app to track every outlay.
- Celebrate Every Win – Build repayment milestones and reward yourself when you achieve them. This way you’ll stay motivated.
- Use Balance Transfers – If you have a credit card with a higher limit, you can use the funds to clear off a few debts in one shot. However, lenders have different terms and rates for different cards. Make sure you check with the issuer beforehand.
- Downgrade The Utility Plans – You can downgrade your phone, internet, cable, and other OTT plans to save some money which you can then direct towards the repayment funds.
- Set Up Auto-Debit – One of the main reasons for rising debts is missed payments. You can steer clear of this by setting up auto-debit options for lenders per the pre-decided dates.
- Debt Consolidation – If you have a good credit score and meet the requirements, debt consolidation loans can help you manage most of the debts in one shot. You can then plan accordingly to repay the single loan.
There are numerous ways to clear off your debts quickly and easily. However, the most important aspect is your commitment to the end goal. Use the tips mentioned above to quickly pay off debts and enjoy a more stress-free lifestyle.