Borrowing money to be able to afford commodities such as a house or a college education is a normal part of life for most of us. Making debt repayments is a normal part of financial management. That said, being in debt can cause serious amounts of stress, which can harm your physical and mental health over time. Fortunately, some simple planning can help you get debt under control and improve your financial situation. With that in mind, here are three suggestions for how you can get out of debt faster.
1. Pay more than the minimum
When you sign up for a loan or line of credit, you will have a minimum amount that you are required to pay back each month. It is always a good idea to pay more than the minimum payment, or you risk paying a high amount of interest. Each month, be sure to pay off as much of the debt as you can, and remember that even an extra $50 will make a difference over time. If you receive money unexpectedly, i.e. a bonus from work or an inheritance payment, then put this towards paying off your debt. You can use a free online financial calculator to check how much you could save by repaying your debt quicker.
2. Cut your monthly outgoings
One of the best ways to get out of debt faster is by reducing how much you spend each month. Any extra savings that you make can then be put towards paying off outstanding debts. There are likely to be countless ways to cut your monthly outgoings. Here are a few ways that you can do this:
- Search online for discount codes and vouchers. For example, use Best Buy coupons to save money on electronics and other household items.
- Prepare your lunch at home rather than buying expensive pre-made sandwiches and snacks from work. You should also ditch your morning Starbucks in favor of a budget-friendly homemade coffee.
- Cancel any subscriptions that you don’t use, such as gym memberships and Netflix.
- Lower your utility bills by being more conservative with your energy and water use. You could also make savings by switching to a cheaper energy provider.
3. Speak with a credit counselor
If you are having difficulties balancing your finances with your debt, then it’s worth speaking with a credit counselor. Most companies offer free expert advice on debt management. They can also help you create a workable budget and give you tips on how to improve your finances and get out of debt faster. You can visit the Federal Trade Commission website for information on how to find the best credit counselor.
Debt repayments are a normal part of life and you should try not to let it cause you unnecessary stress. That said, you must stay on top of your debt and have a clear plan in place to make the repayments. Never borrow a greater amount than than you can afford and make it a priority to repay an outstanding debt as soon as possible. Try the above tips to help you save more and get out of debt faster.