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5 Smart Ways To Pay Off Your Debt Quicker

on February 25 | in Finance | by | with No Comments

For Ken Ilgunas, paying off his $32,000 student loan involved taking on odd jobs in far-away Alaska. The time he took to pay off his loan- three years. Holly Morganelli took up English-teaching jobs in Buenos Aires and Qatar to pay off her debt in a short time of two years after graduation. Both Ken and Holly were resourceful enough to find smarter ways of paying off their debts quickly, says a Forbes article which shares their stories. But this is not the case with everyone. Millennials are burdened by heavy debts, especially student loans, reports The New York Times. And the upcoming holidays don’t make it any easier on the pocket. Before you know it, you’re left with maxed out credit cards and debts running into thousands of dollars.

Getting rid of debt the smart way

Debt cannot be avoided- you need a college education or a new home, emergency expenses arise or budgets fall short. But if you have a debt, there are ways to speed up the process of paying it off. Here are five ways that can help you make the transition from debt-ridden to debt-free in no time.

  1. Write down your budget goals and stick to them

We all have certain financial boundaries and sticking to these is not the simplest of tasks, but this is the best way to be in control of your money, says student resource website Mapping Your Future. Following a few steps to set up your own budget can be a good start. It’s important to create a list that includes both short-term and long-term goals as well as recognizing the difference between wants and needs, says RethinkingDebt.org. Saving money can help you get out of debt quickly!

 

  1. Eliminate the plastic

According to CreditCards.com, 39 percent of Americans carried credit card debt from month to month as of March 2012. That can leave you with debt for long time! To pay off your card debt quicker, start by calling your credit card company to check the interest rates you’re paying and if they can be lowered, says blog ReadyForZero. If you have to pay off debts on many cards, choose to pay off the one with the highest interest first- it’s the most efficient way of going debt-free. The best way would be to stop using a credit card to pay all your bills- make cash or debit card payments or limit your use to just one credit card if you absolutely have to.

  1. Lower major expenses

Check what your biggest expenses are and look for ways you can lower them. A Forbes article suggests you take a look at your monthly expenses and see where you can cut back. For example, you could move into a smaller place if your mortgage or rent costs are shooting up- Fiona Lee shares how she saved $580 monthly on housing and utilities on the blog CreditKarma or if you’re paying heavy premiums on your car insurance, check out the rates from Hartford automobile insurance and you could save over $500 there too.

  1. Make extra money

A good way to pay off your debt is to get some additional income- a second or third job, freelancing, renting out an extra room in your home to tourists visiting during the holidays or even selling your old stuff on sites like eBay and Craigslist should do the trick. For students, getting a side job or freelancing are good ways to make money, says an MSN Money article. Some people take the extreme paths to pay off their debts quickly. From joining the Air Force and the Merchant Marine to selling a $20,000 guitar, read how some people chose to go debt-free in this DailyFinance article.

 

  1. Get a money saving buddy

You need all the help you can get when you make the decision to go debt-free. If you’re in a precarious situation with your debt, it’s recommended you receive assistance from debt counseling agencies that can help you deal with your money problems, but make sure such agencies are reputable, advises the Federal Trade Commission. Before your debt gets out of hand, join other frugalists in saving money, or let you Smartphone keep track of your finances by downloading some these 25 money-saving apps listed by Mashable.

 

Picking a money buddy can help you deal with the psychological stress of debt, says a post on The Simple Dollar. And how important it is to be stress-free! Paying off debt can bring you a number of benefits. From a self-esteem boost to better health and relationships, going debt-free rings in a number of bonuses, a Fox Business report says. Are you debt-free? Tell us the story of how you got there.

 

 

 

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