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Are you looking for ways to achieve more financial freedom for you and your family? Are you tired of having a portion of your paycheck go directly towards your debt? If so, then you need to learn how to get out of debt fast.
Whether you’re dealing with a manageable amount of debt or a large amount, it’s time to take back control. Once you pay off your debt, you’ll be able to allocate your profits towards other ventures.
See below for an in-depth guide you can use for getting out of debt and creating more room to reach your financial goals.
1. Use the Snowball Method
We’ve all heard of the snowball effect. When one small issue compiles itself and, all of a sudden, it turns itself into a much larger issue. If we’re being honest, that’s how most people find themselves buried behind a massive amount of debt.
However, what most people don’t realize is that the same snowball effect can be used to pay off your debt and get you back in the driver’s seat of your finances.
Known as the snowball method, this is a great way to create momentum for paying off your debt, lessening the time it takes to do so, and still be able to fit your budget.
Here’s the idea: list all of your debts out, as well as the minimum payment that you can make towards them each month. Pinpoint the lowest payment of them all, then double the amount you pay on that specific form of debt.
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Once you’ve paid off that form of debt completely, you apply the amount you were paying on it towards the second-smallest loan. After that second-smallest form of debt is completely paid off, you’ll place all of that money towards paying off the third, smallest loan… you get the idea!
This debt repayment method has helped many people take back control of their finances in a time-efficient manner. It can do the same for you!
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2. Start a Side Hustle
Most of you that are reading this make a great living for yourself. Your job pays enough to live your life and provide all the necessities.
In fact, most of you can afford all of your monthly expenses, blow money, and everything else in your budget with your current salary. It’s the debt that’s complicating matters.
If that’s the case, then an easy solution is to start a side hustle or get a part-time weekend job to bridge the gap. This can also be used hand in hand with the previously mentioned snowball repayment method so that you can pay off your debt faster.
The truth is, there is a lot of fun side hustles out there that you can start. For example, you could become a freelance writer and get paid by the article. You could use your photography skills to do wedding photos and make great money doing something you love.
Start by researching different side hustles or part-time jobs that work with your schedule, then try one out. We guarantee you’ll love the extra wiggle room it gives you in your debt repayment.
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3. Switch Out Your Car
For some of you, this idea might sting. You love your car and all of the cool gadgets that it offers you, but that car might not be practical for where you currently are in life.
For example, you might be paying a higher car loan for a truck or SUV, when you could save a few hundred dollars each month by driving a sedan instead.
Some of you are tempted to buy a brand-new car, which is counterintuitive to paying off your debt. First off, a new car experiences major depreciation the moment you drive it off the lot.
Secondly, you could invest in a high-quality used car at a better price point and use the money you saved towards your current debt. One of which is probably your current car loan.
4. Give a Bit Extra
For some of you, the snowball method might be a bit too extreme. Some of you can’t work it into the budget at the moment, there’s nothing wrong with that!
Here’s what you can do: create your budget and see how much you could reasonably add to your debt payments each month. Divide that number among the number of sources of debt that you have, then add that amount towards each one.
For example, let’s say you find out that you can work $200 more towards your debt repayment each month. You have four sources of debt that you’re currently paying off, so $50 would go towards each of them, helping you create more momentum.
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5. Sell Your Belongings
Most of us look at the items we no longer use and think “no one else needs for that”. But as the old saying goes: one man’s trash is another man’s treasure.
If you’re struggling to come up with extra money to put towards your debt, then create it for yourself by selling things you no longer use.
Walk into your garage and closets with a pen and paper. Write down each item you find that you want to sell, the research how much they’re going for.
How to Get Out of Debt Fast: Adjust Your Priorities
Now that you’ve seen how to get out of debt fast and take back control, the purpose is clear: you need to readjust your current financial priorities. That’s all it takes!
If you would like more tips on how to get out of debt, then check out this excellent post from Possible Finance
Are you interested in investing? If so, then read this article for pointers on how to start investing online in 2021.
If you have any further questions, please feel free to reach out via my contact me page and I’ll be happy to assist you further.
Disclaimer - Engineer my Freedom is not a licensed or registered investment adviser or broker/dealer. We are not providing you with individual investment advice on this site. Please consult with a licensed investment professional before you invest your money. This site is for entertainment, informational, and educational use only. Any opinion expressed on the site here and elsewhere on the internet is not a form of investment advice provided to you. We use information, data, and sources in the articles we believe to be correct at the time of writing them, but there is no guarantee of their accuracy, completeness, timeliness, or correctness. We are not liable for any losses suffered by any party because of information published on this site or elsewhere on the internet. Past performance is not a guarantee of future performance. By reading this site or subscribing to it, you agree that you are solely responsible for making investment decisions in connection with your funds.
