Nobody really expects or plans to get into debt, but it can sometimes be unavoidable, like when you’re buying a house or car. As much as it might be needed, what you don’t need is to stay in debt. You’ll want to get yourself out of it as much as possible and actually get out of debt.
You don’t have to sacrifice the quality of your lifestyle when you’re doing this, though. Instead, it’s a matter of being practical with your approach, and you could be debt-free relatively easily.
While it could take you some time, depending on the size of your debt, it shouldn’t be as complicated as you’d think.
Get Out Of Debt: 5 Practical Strategies
1. Try Snowballing
A technique called the debt snowball could be a great way to reduce your debts. It involves making just the minimum repayments on all of your debts, except the smallest one. With this, you’ll overpay anytime you’re making a payment. You’ll end up clearing that debt relatively quickly, letting you focus on the rest.
Keep repeating this process until you’ve cleared all your debts. While this is only an option if you have several debts from different sources, it can still be an effective one to try. You’ll end up paying them off one by one while still keeping on top of everything.
2. Pay Off With Windfalls
It’s not uncommon to get a tax refund or even a bonus at work, and these financial windfalls are often great to get. If you get one, you might end up wanting to splurge and treat yourself, and it’s natural to think of doing this. When you’re trying to get out of debt, though, it mightn’t be the best strategy.
Depending on the size of the windfall, you could make a decent dent on your debts. You could even pay off quite a few of them, making it worth committing your windfalls to them. They’ll be an unexpected help in clearing off your debts.
3. See What Can Be Written Off
What you mightn’t have realised is some debts can be written off if you meet certain criteria. You can have almost any debt gotten rid of once you’ve met this criteria, and you can even have student debt written off with it. It’s worth spending some time researching how you can go about this.
See whether you meet the criteria and follow the specific steps to write off your debt. It should be surprisingly simple, and you’ll be rid of it before you even know it.
4. Re-Examine Your Budget
You’ll naturally need to have a budget when you’re trying to get out of debt. You would’ve put this together when you first took on the debt, and it might’ve been the right one for you then. It mightn’t be the best one for you now, however. It could be worth re-examining your budget to see what you can change.
Focus on lowering your expenses as much as you can without being too harsh on yourself. If there are quite a few unnecessary expenses, consider getting rid of a few of them. It’ll free up more money and let you pay off your debt more easily.
5. Make More Than Minimum Payments
When you take on a debt, you’ll be told what your minimum payments will be. These are usually quite affordable when you first take them on, but that doesn’t mean you’ll have to stick to them, though. In many cases, you have the option to pay more than your minimum. It’s your ‘minimum’ payment, after all.
Your bank will usually be happy to receive more than the minimum payment, so do it whenever you can. If you do, you’ll pay off your debt faster than you otherwise would have. There’s no reason not to overpay your debt payments when you have the cash to do it.
Get Out Of Debt: Wrapping Up
You’ll naturally want to get out of debt as quickly as possible, and you might be willing to do anything to get there. You shouldn’t have to cut out all of your expenses and cut down on the necessities to do this, though. By being practical, you can reduce your debt relatively easily without making your life unbearable.
It’ll still take you a bit of time to actually pay everything off, especially when you have a large debt. Despite that, it’s still more achievable than you’d think. There’s no reason not to implement the right strategies.