If you joined us in the last part of this series, you know that getting out of debt can seem overwhelming and scary at first, but that it doesn’t have to be so bad. The tips we shared in Part 1 of this series are great first steps for getting out of debt. Although it doesn’t happen overnight, some of the tips we’re sharing this time around can certainly help the process move along a lot quicker. Keep reading for some of the best tips for getting out of debt quickly.
Getting Out of Debt: Part 2
1. Find a side hustle
There are so many ways to make money on the side if you hustle these days. Whether it’s online or in person, there are lots of options. Many people sell things on local yard sale sites, Craigslist, and eBay as supplemental income. If you have a lot to purge, use your spring cleaning time wisely and sell everything you intend to get rid of. It might take some time, but the extra money put towards debt will be a great help. Some people also have success with direct sales companies and selling a product they love. Even consider a part-time job to help you pay off debt faster.
2. Call your credit companies
If you have a large balance and you’ve fallen behind or just simply want to pay it off sooner, consider calling the company. You can ask for them to accept a (less than what you owe) lump sum in order to pay it off all at once. Many companies are willing to do this and it’s a win-win situation; they get to close your account and have their money, and you get to have the debt paid off.
3. Research consolidation
If you have debt dispersed throughout different cards, consider trying to consolidate your debt on one card. This goes for loans too – you can sometimes consolidate loans. This isn’t always an option, but it’s a good idea to utilize this if you’re able to and the interest rates are better. This way you don’t have payments due all over the place and you can keep it all with the same interest.
4. Try the snowball method for getting out of debt
Have you ever heard of the snowball method? Essentially, you will create a list of all the debts you have, ranging from smallest to largest. You’ll put extra money towards the smallest debts first and get those paid off. Once they’re paid off, you will put the amount you were paying on to the next debt, eventually snowballing until your biggest debt is paid off. This helps you get out of debt faster and motivates you to keep chipping away at the debt! You can also start your snowball by paying off the highest interest rate first (regardless of balance) to save the most on interest fees.
5. Use bonuses for debt
Whether you find money lying around that you forgot about, get a bonus check at work, receive your tax refund or come into some kind of other money, it’s a good idea to put all “found money” towards your debts. Rather than spending it and thinking of it as free money, put it to good use in helping you get out of debt.
Pro Tip: Save ALL your change! Once you fill a jar, take it somewhere like Coinstar or your local bank to redeem it for cash. Then, send that cash straight towards a debt to pay!
These tips should help you start down the right path for getting out of debt. What other tips would you share? Are you finding that it’s harder or easier to use the snowball method? Let us know in the comments below!