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Paying off debt is hard, I mean really hard. Anyone who is in debt wants to be free of it, who can blame them right? Just about everybody has the means to get themselves out of debt. Yes, even if you are living from paycheck to paycheck. So why are so many people still buried under a pile of bills?
The problem is that most people are not willing to do the work to make it happen. That might seem like a harsh statement, but in a lot of cases, it’s true. It takes a lot of determination to commit to getting out of debt.
Not only does it take determination, but it also takes a long-term commitment, depending on your situation, but it could also be years. Which means you need to keep up the fight for as long as it takes to get it done.
You also have to make sacrifices. I know that this is one thing that many people just aren’t willing to do which makes paying off debt pretty much impossible. There’s a quote I read somewhere that says “You can’t get out of debt by doing the same things that got you into it”. This saying really is true, the things you are doing now have to change, you have to give up some things to get out of debt. Isn’t the reward of being debt free worth it?
Just the thought of how much work needs to be done can be very overwhelming. The key is to constantly keep moving forward and to keep your eyes on the prize. Every little step you take to paying off debt makes a difference. It might not seem like it right now, but once you set your mind to it, things will become so much easier.
Here are some ways to help you take the steps you need to commit and stick to a debt repayment plan and finally rid yourself of that debt monster.
How to be Proactive About Paying Off Debt
Create a Budget & Stick to It
I know, many people hate to budget. Here is the thing, you need a budget if you ever want to control your money instead of letting your money control you. There is just no way around it. Trust me, it gets easier with time.
You need to create a budget or rework your existing budget to maximize your debt repayment strategy. Look at every little item on your budget and get rid of any items that are not essential. These are sacrifices you are going to have to make now for a better future.
Next, look at your flexible expensed, things like insurance, energy bills, and groceries. These are expenses that are necessary but the cost can still be reduced pretty easily.
You can do things like shop around for better insurance rates, bundle insurances, or even increase your deductibles if it makes sense to do so.
Energy bills can easily be reduced by being mindful and not wasting energy when you don’t need to. Things like shutting off lights and TVs when leaving the room are very simple to do. You could also use power stripes to reduce vampire energy loss. How about line-drying clothes or not turning on the washing machine or dishwasher until there is a full load to reduce wasted energy. You can check out 13 Ways to Save Money on Energy Bills for more great tips.
Saving money on groceries is my all-time favorite way to cut out unnecessary spending. It is one of the easiest ways to reduce expenses. You could start meal planning around sale items, you could start couponing, or use rebate apps to get cashback on purchases.
There are many ways to cut back on expenses, you just need to make an effort to do it. You need to be proactive about it.
Set a Payoff Date
Now that you have whipped your budget into shape, and have reduced expenses, you have a better idea of how much money you can dedicate to your debt repayment plan. Take your total debt amount and divide it by the amount you are able to throw at your debt each month. This will give you the number of months it’ll take to get rid of your debt.
The number of months won’t be an exact date since interest rates and such were not used in the calculation. But it’ll give you a good idea. Write that date down somewhere and when things get you down, remind yourself that there will eventually be a light at the end of the tunnel.
Decide on a repayment plan
Now you need to come up with a debt repayment plan. Two of the most common methods are the “Debt Stacking” method and the “Debt Snowball” method.
The Debt Stacking method is done by attacking the debt with the highest interest first. Once that is paid, you stack the amount to the minimum payment you are making on the next highest interest debt and so on until you are debt-free.
The Debt Snowball method is where you attack the debt with the lowest balance first. Once that is paid you stack the amount to the minimum payment you are making on the next lowest balance debt and so on.
Personally, I prefer the Snowball Debt method; although the Debt Stacking method will save you some money on interest, in the long run, you see results faster with the Snowball Debt method. Just seeing the results of having one debt paid off is so encouraging and will help keep being proactive in paying off debt.
Increase your income
Increasing your income is a great way to help you get out of debt faster. You could ask your current employer for a raise if it’s been a while and you feel you deserve one. You could also see if you can put in some overtime to increase your paycheck.
Find creative ways to make extra money to help move things along quicker. How about starting a small part-time business from home, there are many things you can do to make money on weekends. This work at home guide has a bunch of different ideas to make money from home as well as a list of employers eager to hire people to work for them.
Another way to make money quick to make paying off debt faster is by selling stuff that you no longer need or don’t use. I’m sure if you looked in your closet, you could find clothes that don’t fit or that you never wear to sell to make some quick money. How about cleaning out your basement, garage or attic? I’m sure there are plenty of things that you could find to sell. Check out cash in on clutter to find the best places to sell your unused stuff.
Paying off debt takes time but if you are proactive and willing to put in the work, you can do it. The more you do, the faster you will get that monkey off your back so you can start living the life you deserve to live.
Now that you have a plan of action, here are a few posts with ideas on how to bring in some extra income and help you start paying off debt fast.
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