Seven Easy Tips to Get Out Of Debt
If you have absolutely no debt, consider yourself in the minority. Everyone seems to carry a ton of debt these days and it is not something that has to happen. No matter what anyone might say, debt is not a necessary evil. You can have things, live happily and keep your debt under control no matter what you make for a living. The key is to be willing to do what it takes and the ability to execute your budget. Here are seven awesome tips to help you find your way clear of debt quickly:
Redo your budget
If you were to lay out all the budgets in America and look at them closely, the percentage that is actually reasonable would probably be quite low. Budgets are notoriously backwards because they are often done haphazardly. Look at your budget and revamp it to where you are putting the maximum amount possible towards your existing debt. Do it now!
The best place to start cutting spending are on all those little wants that you have. You might think you don’t have many, but a month of tracking your spending will shock you. I want you to start a spending journal. Write down every single thing you spend money on, how much you spent, and then label it as a want or a need. Then tell yourself you have very few wants. If you laugh at yourself, go in and cut out the wants. If you are not, then congratulations! You also are in the minority. It can be very eye opening to see what you actually spend your money on. Have you ever started a diet and been asked to start a food journal. It’s the same concept. Sometimes we just don’t realize how much money we are spending.
Get rid of something excessive
This might be an overloaded cable television bill, a loaded up cell phone bill or that pair of shoes a month habit at Macys. Whatever it is that you don’t really need, eliminate it. Nobody watches 1000 channels anyway. Trim that sucker down to size and take the savings for debt reduction purposes. Netflix is amazing by the way.
Pay the high interest stuff off first
Do you know the interest rate you have for each credit card? You should. It’s important. This task a big one and really common sense. Take your bills that are hitting you with the most interest and get rid of them first. This does not mean to ignore the others or you will end up with late charges to take the interest’s place. Pay enough to cover all of them and put the extra towards the high interest and APRs.
If you have a credit line on a lower interest rate credit card, it might be beneficial for you to move the higher interest rate credit card balance to the lower interest rate credit card. Every little bit of money helps.
Consider lower cost alternatives
Instead of buying Starbucks, consider McDonalds coffee. Instead of Victoria’s Secret, consider the Walmart lingerie aisle. Get the picture? There’s always a way to use a coupon or coupon code to find a product you want at a cheaper price. It would be beneficial for you to find free or cheap entertainment ideas too. For example, don’t go see that movie on opening day, just wait a few weeks and see it at the dollar theater. You can still have fun and spend quality time with the people you care about without going off budget.
Roll over your payments to new debts
When you pay off a huge debt, don’t take that freed up money and roll it into your budget. Instead, take it and apply it to the next biggest monster. This is called snowball debt reduction and it works. Keep rolling that snowball until you have no major debt. Then you can have some fun while you are debt free.
Sell off your luggage
By luggage, I mean your excessive things around the house. Many of these things are exactly what caused you to be in debt in the first place. If you don’t use it, get rid of it. Set up a yard sale, go to the flea market or pop it up on Craigslist….whatever you can do to sell it off and add the funds to your debt reduction makes sense. There will be plenty of chances to accumulate stuff later after you get rid of your debt. Then you can buy things you really will use and do it in a way that is debt free. Be sure to read our very popular article called “How to Successfully Sell Items on Craigslist.” I’ve made a great deal of money doing this. It works!
Bring in some Extra Income:
Sometimes you need to work an extra job or do a side gig to help things go a bit faster. I used to shop at garage sales and sell the items on Craigslist just to make a little bit of extra money on the side. I have many friends that still do this because the profit margin can be huge. I know a few people that make a pretty decent living doing it too! I’ve gathered up all of the tips and tricks on reselling Garage Sale items on Craigslist for profit in a two post series. Read another article here called Treasure Hunting for Profit where I give examples of how to turn $50 into $650 with photos and detailed item examples.
I hope these tips help you to really start thinking about your budget. We have tons of other Money Saving Tip articles to help too. Be sure to check them out!