Tips to Pay Off Debt

Here are a few different tips to pay off your debt more quickly:

  • First, you should get a clear picture of your debt. 
    • This will help you see the overall picture & know where you stand. 
    • Start by recording all of your different loans, your balance, and how much interest each of them charge. 
    • By seeing which one charges the most interest, this can help you prioritize which one to begin paying off first and faster. 
  • Know your income. 
    • To get out of debt and pay on it, it is important to also have a clear picture of what your income is. 
    • Add up all of your sources of income, record it & record all of your different expenses (house, utilities, car,etc.)
    • Subtract those expenses from your income and put some of what is left towards your savings and some towards your debt payments! 
  • Cut your expenses. 
    • As you look at and evaluate your expenses, find ways to cut back on them! 
    • Find ways to save money, even if it is a small amount – it will add up in the end. 
    • Suggestions: cancel some unused subscriptions, eat out less, don’t spend money on going out, buying new clothes, etc. 
  • Increase your income. 
    • Get an additional job if you have extra time
    • Walk dogs for extra money, clean houses in your spare time, babysit on weekends, take up serving a couple of nights a week, etc. 
    • You can also find jobs such as freelance ones online like: writing, editing, transcribing, web design, reviewing companies and more.
  • Do NOT take on more debt. 
    • Do not get another credit card, if you already have credit card debt. Do not get another loan if you’re still paying on another one. These may seem like no brainers, but many people continue to get themselves deeper and deeper into debt once they are already in the hole.
  • Consider consolidating.
    • Try looking for an opportunity to consolidate all of your debt into one loan at a lower interest rate. 
    • This will also take multiple lenders off of your back.
  • Prioritize. 
    • Put your high-interest loans first. 
    • Make more and higher payments to them to pay them off more quickly, ensuring you owe less interest in the end. 
    • Continue paying on the lower interest ones too, but if you have extra money – put the high-interest loans first! 
  • Negotiate with lenders. 
    • Make the first move when talking to or negotiating with your lenders. 
    •  Approach them and explain your situation to create an agreement with them to make your payments easier. 
  • Sell items you do not need. 
    • Look through your belongings and think of ways to sell ones you don’t need anymore. If you haven’t used it or worn it in years, chances are you never will again – so sell it! 
    • Use craigslist, Facebook Marketplace, Poshmark, Amazon, eBay, or a good old fashioned garage sale, etc. to sell them. 
  • Know when it is finally time to seek out Debt Relief. 
    • If more than 50% of your annual income is going towards your debt payments, consider filing for bankruptcy protection or seeking help from a nonprofit credit counseling agency. 
    • This may discharge some of your debts and give you more time to reorganize your finances. 

Debt is not always a bad thing, but it can get out of hand, and if that happens it can be bad. Having credit cards, loans and debt will ultimately help you gain credit and can help you get out of emergencies which are both good things, but when you begin to dig too deep of a hole things can get out of hand. 

Try using these tips to pay off your debt more quickly and get your finances reorganized and back on track! 

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