Smart Ways to Pay Off Your Debts Super Quick
Debt is always a threat to financial freedom, and the last thing you want is to be held back by it for too long. Unfortunately, even with the best financial efforts, sudden circumstances beyond your control like a sudden job loss, a severe illness, etc., can put you in an uncomfortable position financially. Whether you are struggling to move a mountain of financial obligations out of the way or carrying a small negative balance on your credit card, any amount of debt can make it very difficult to move ahead. The longer the debt lingers, the harder it gets to recover. So, if you’re always stressing about how to pay off your debts quickly, here are a few ways to consider.
- Track your spending
First things first – you need to track your current spending and try to find out where your money goes each month. Keeping track of your expenses should help you identify some of the expensive or unnecessary shopping habits you need to cut down on or avoid entirely. This decision will be challenging if you do not know where your money goes. Fortunately, you do not need a professional financial advisor to help you track your spending. There are easy-to-use money tracking apps you can download and use. You can also try keeping a notebook to record the progress you are making. Be sure to keep receipts of anything you buy to make the process a little easier. If you can, use a budget worksheet as that can also help give you a good picture of spending habits.
- Negotiate for a lower interest rate
Call or visit your current creditors to negotiate for a lower interest rate. This is a debt relief tip many people are hesitant about as they believe an interest rate cannot be changed. Well, it is possible to negotiate for a lower interest rate, and you would be surprised at the good bargain you would receive from your creditor- depending on your payment history. If you have a healthy payment history or relationship with your creditors, you will stand a better chance of negotiating for lower interests. It would be better to avoid using credit cards to avoid piling up more debt. You can go for low-interest rate loans to keep your debt at a minimal amount, making it easier to pay. You can visit sites such as www.gdayloans.com.au to find a quick, low-interest lender.
- Pay more than the minimum payment
If you want to get out of debt quickly, you should try paying as much as you can towards your debt, and the best way to do so is to pay a bit more than the required minimum payment. Using the debt snowball method, you knock off your debts from the smallest to the largest. Doing this gives you momentum as you clear out each balance. Take advantage of every opportunity to make higher payments, as this will bring you closer to clearing your debt quickly. Start by creating an initial budget with a minimum payment amount taking up at least 20% of your total income (but take every opportunity you get to raise this percentage).
- Sell some items
Sometimes, you are in debt because you have spent money buying things you do not need or probably needed for just a short while. The good news is, if that is the case, you can sell these items to gain some money to clear your debt. Admittedly, this can be a little uncomfortable (if being in debt isn’t uncomfortable enough). However, selling off some things you do not need to raise money is a fast way to clear your debt. The number of items you may need to sell depends on how quickly you are willing to settle your debt. And, when it comes to what you should sell, the answer is anything valuable that you can do without for now.
Look around your home and take stock of the things you have. Start with valuable items that you do not need or haven’t used in a while. Get your math skills on and calculate how much you can make from them against your debt. If that does not take a significant chunk out of your debt, you may have to start considering which assets are worth selling.
- Freelance or get a part-time job
Selling off some of your stuff may be a swift choice, but you might not raise enough to settle your debt. In that case, you can try taking on a part-time seasonal job or consider freelancing. A part-time or freelance job can give you enough flexibility to focus on your full-time job while making extra income. From a store manager to a tour operator, there are several options available to choose from. If you have specific skills that may be needed online, surf the internet for opportunities. Browse marketplaces and platforms for freelancers and find out which options match your skills.
- Consider cashing in on your life insurance
It may not be the first option nor the most comfortable one, but if you find yourself crashing under the weight of debt, you may want to consider cashing in on your life insurance. Doing this will make it possible to pay off large chunks of your debt quickly. However, this should be a last resort option as it is risky to be without life insurance. Ensure that you have no beneficiaries that may need the policy when you are ready to cash in on it.
- Use savings to pay off larger debts
Although equally risky, using your savings to pay off debts is a better option than cashing out on your life insurance. You can consider using your saved money to pay larger and more pressing debts. It is good to have some cash stashed away for pressing times, and truthfully, your mounting debt is such a situation. You do not need to clear out your savings account to clear the debt. If the money can clear the debt, then do so. However, if it is a significant debt, you can use the funds in your savings account to gradually pay the debt to ease the burden.