When life surprises you with unexpected events, the debt can pile up much faster. Circumstances like illness, home repairs, accidents, or a sudden job loss can force you to take loans. Sometimes, the loan piles up so rapidly, you may feel like it’s never going to end. All your worries down here, we are going to suggest you 7 best ways to quickly get out of debt so that you can live a debt-free life soon.
1. Always pay more than the minimum
The faster way to clear your debt is to pay more than the minimum amount. The more amount you pay for your loans, debits, or credits the faster they will end soon. Most of the loan companies or credit card companies customize the minimum payment in such a way that when you pay your minimum payment, you are paying a large sum for the interest and less for the actual sum of interest. This will take you years and years to clear your debt.
2. Minimize your expenses
Someone has said it right, “The fastest way to go broke is to act rich”. If you want to quickly get out of debt, save as much money as you can. If you have fancy expenses as you go shopping every weekend, you always eat out, and things like that will eat your finance. So, to save you money and clear your debt faster, try to minimize the expenses that you think are not important. In that way, you will be able to save money and pay more amount to clear your debt.
3. The Snowball Method
The snowball method works like a rolling snowball. A snowball starts at a small size and gradually becomes larger and larger. To try the snowball method for clearing debt, list out all your debt from small to larger ones. Once you have listed down all debt, start paying more amount to your small debt, while paying the minimum amount of your bigger debt.
Over a period of time, you will notice your small debts have been cleared and only the larger debt is remaining. Again pay more than the minimum amount or as much as you can for your larger debts from the amount you saved from clearing your smaller debts.
4. Work Part-time
When you have a lot of debts to pay, a single source of income may never help you to get out of debt quickly. So, you can earn more amount by doing some part-time jobs. Today there are plenty of part-time jobs like Baby Sitting or freelancing in sites like Upwork, Fiverr which can help you earn extra incomes while doing your main job.
Once you make more money from your part-time, use it to pay for your debt. The more money you make, and the more money you pay, you are more likely to get out of debt faster.
5. Work on Holidays
As we said earlier, the fastest way of getting out of debt is by earning more and paying more. While everyone enjoys their holidays, you can grab a job and work in your holidays as well. Summer breaks and other seasonal jobs will give you an extra hand to pay for your debts.
You can find plenty of part-time jobs in such seasonal holidays in your community. Although a long-term commitment job cannot be approachable, short-time jobs can easily be located within the community. Make sure you search and try to work on your holidays as well. The extra money will help you pay your debts faster.
6. Settle down the expensive debt first
This strategy works like the Snowball method effect but has a bit different approach. While we paid small debts first in the snowball method, we will now pay our most expensive debt first. Expensive debts are charging you a high interest rate, so it’s best if you want to get rid of them as quickly as possible.
Once you clear your most expensive debt while making minimum payments to other debts, use that spare money to clear your other expensive debt. Repeat the process until you are free from your debts.
7. Sell things that not necessary
You might have some old second-hand equipment that you don’t need now. You can sell those things to make extra money. In this way, you can quickly manage around some cash by selling things that you think you can live without.
There are several groups on social media where people search for second-hand objects. Popular social media app- Facebook has a platform called Marketplace where you can list down the belongings you want to sell.