Budgeting tips to help you get out of debt
You had it with your debt. It’s a constant concern and you strive to get rid of it. You’ve tried tackling it, but you don’t feel like you’re making much progress.
That’s understandable, but think about it: how long did it take you to get into your situation? Getting out of this will take persistence, forbearance, and maybe multiple approaches. With that in mind, here are household tips to help you get out of debt.
Find ways to cut spending
Let’s get this straight: It doesn’t matter what financial strategy you use if you don’t control what got you into trouble in the first place – overspending.
That means tracking your spending to see how much you’re spending and what you’re spending it on.
Once you’ve done that, you can find ways to save money (perhaps that daily commute latte?) that you can use towards your commitments. Those small purchases add up, and budgeting can get you anywhere.
Embrace a debt-repayment approach
Two popular debt settlement strategies are the debt avalanche and the debt snowball. With the former, you take on your debt with the highest interest while making minimal payments on your other obligations.
After paying off that debt, move on to the next higher installment. Rinse and repeat until your debt balance is zero.
Debt Snowball works best for those who need a little motivation to keep the “ball” going. After you’ve paid off your smallest debt—and celebrated it properly—work on the next smallest until you’re debt-free.
As with the debt avalanche strategy, be sure to continue making minimum payments on all of your other debts.
Use automatic transfers
Use automation to your advantage. You can have your bank make automatic payments on your plastic and use automatic reminders to keep track of payment due dates.
There are also online tools that you can use to see how your debt reduction is progressing. Yay, technology!
If you have a lot of bills and are struggling to keep track of all the different payments and due dates, debt consolidation may be the strategy for you.
It means turning your debt into a single fixed payment due on the same date each month. If your credit rating is good, you can save money on top of that.
If you’re eligible, you can purchase one of these 0% interest balance transfer credit cards that you can roll your high-interest debt onto and then pay off before the introductory rate skyrockets again in a year or more.
Or you can get a consolidation loan that will combine your debt into a new loan, hopefully at a better interest rate than what you’re paying now.
For example, in the state of Lone Star, consolidation and debt settlement are currently popular when it comes to Texas debt relief.
After all, many residents there are increasingly relying on credit cards to make ends meet during this time of inflation. Such high occupancy rates are a sign of impending financial trouble.
Get a gig or side hustle
In addition to saving where you can, you may need to find more income to pay off your debt. Do you have a hobby that you enjoy?
Maybe there is a way to monetize it. Or you can take up a side hustle like babysitting, dog walking, or web design. There are endless ways you can withdraw more cash.
Consider a cash-out mortgage refinance
If you are a homeowner with a lot of equity and are eligible for a mortgage refinance at a lower interest rate, consider a payout refinance option.
With this approach, you can take some money out of your home’s equity and put it on your debt. The catch here, though – and it’s a big one – is that you could very well lose your home if you miss payments.
All in all, if you follow any number of these tips to get out of debt, you can once again enjoy true financial freedom.
That is, if you cut spending. If your situation is worse, consider debt settlement with Freedom Debt Relief.