Getting out of debt fast is what most of us dream of. In fact, we’d all be better off without debt. Debt can hang over your head like a cloud, reminding you that you have bills up to your neck and making you feel guilty every time you want to buy an ice cream or a new dress. You may be at a point where you think you will never get out of debt fast! But here are the facts: YOU put yourself into debt in the first place. And debt will not get paid off without a little work and commitment from you. Read on for top tips and advice on how to get out of debt fast.
1. No Credit Cards
What is the number one thing that puts you in debt? Most people will answer with “credit cards”! A credit card is a dangerous thing to have, and you can rack up debt so quickly when you have one. The best thing to do is cut your card up and throw it away. Using only debit cards or checks as payment methods will ensure you never buy more than you can afford. If you MUST keep a credit card, I would suggest leaving it home in a safe place and saving it only for emergencies.
2. The “Snowball” Method
If you’ve never heard of Dave Ramsey, you won’t know about the snowball effect. In Dave Ramsey’s materials, he teaches that in order to get rid of debt, you must “snowball” it. Start with your smallest debt. While paying the minimum payment on all other debts, pay large sums toward your smallest debt until it’s paid off. Then continue on to your next debt until all your debt is gone. This method is quite effective and works well!
3. Cash Only
Want to know how to get out of debt fast? Then use this tip. Carry only cash with you. Leave your debit card at home. Although debit cards are not a poor method of spending money, if you have cash, you can easily limit what you spend. When cash is gone, it’s gone! And it’s always harder seeing your hard-earned cash go as opposed to the swipe of a card. You will be more conscious of what you are spending when you employ this trick. The less you spend, the more you have to put towards paying off your debts.
4. Prioritize Your Necessities
When you are concerned about getting out of debt fast, you must learn to prioritize your necessities. Which is more important to you, having gas in your car or getting your nails done? Putting food on your table or buying a new outfit? If you are hard up, you may have to make decisions to cut off your cable or Internet until you get caught up on your bills. When you cut out unnecessary stuff, it leaves more money for paying off your debts.
5. Arm Yourself with Information
I’ve noticed people who are trying to get out of debt fast make the same mistake over and over. They focus on just making the minimum payments each month so they have enough money to buy other things. Then, they are left paying an even higher interest rate because they didn’t pay off their debt by the deadline. Learn your deadlines and interest rates. You will end up paying for items you have put on the credit card twice if you don’t watch your interest.
6. Stop Spending
Want to know the simplest way to get out of debt fast? Here it is: simply stop spending. Many times, our “wants” get confused with our needs. You may have to learn the hard way, but please, take my advice and spare yourself! When you have to wait until payday to buy toilet paper, you may start regretting the boots you bought last week. When you stop spending, it will leave more money to put towards your debts.
7. Make Larger Payments
If your priority is getting out of debt fast, look at it the most logical way. Stop paying the minimum payments, and put more towards your debt! Not only will you have your bill paid off quicker, but also you will spare yourself the ugly interest rates I mentioned earlier. And larger payments can be manageable if you plan for it.
8. Downgrade if Necessary
Many people don’t like this tip for getting out of debt fast, but it’s a champion when you use it. In order to pay off large chunks of debt, you must have money, right? Well, get more money by downgrading. It may only be temporary, but if it helps you out, why not go for it? Some areas to downgrade in are cell phones, vehicles, Internet or cable, and insurance plans.
These tips will absolutely set you on the fast track to getting out of debt fast. Remember, if you’re truly serious and committed and ready to get out of debt fast, you may have to make a few sacrifices along the way. Once you have learned how to get out of debt fast, keep yourself out of debt by saving up for the things you want and paying for them up front rather than using a credit card or getting a loan. What are your tips for getting out of debt fast?