With so many Americans regularly spending more than they make, it is no surprise that mounting debt is an issue for so many people. Whether it be credit card debt or student loan debt, the crisis is only continuing to grow. Here are six tips to employ when looking to get out from under crushing debt as quickly as possible:
MAKE A PLAN: The first thing that you need to get out of debt is a plan. An advisor at Dutchess Partners can help you to devise a plan to pay off your debts. Identifying your spending weaknesses should be a crucial part of this plan. Whether that be morning lattes at the local coffee shop or an expensive online shopping habit, eliminating your financial weaknesses is the first step to freeing up more money to put toward debt. Included in this plan should be a budget to keep you on track once you are out of debt.
TRY THE DEBT SNOWBALL METHOD: The debt snowball method operates under the principle that you put all of your extra money toward the smallest debt first while still paying the minimum amount due on the other debts. After the smallest amount is paid off in full, you take that money and put it toward the next smallest debt. By snowballing each payment, you will get out of debt more quickly. Paying off the smallest debts first will also give you a psychological win and encourage you to keep grinding out the payments.
PAY MORE THAN THE MINIMUM: This goes without saying. The biggest downfall of being in debt is the enormous amount of money that you end up paying just on interest. By making more than the minimum payment each month, you apply more money to the principal. This will accelerate the rate at which the overall debt is eliminated.
LOOK FOR A SIDE HUSTLE: The fastest way to get out of debt is to apply more money to each payment. Working at a side gig can earn you money with the sole purpose of using that extra income to pay off your debt. In today’s increasingly wired world, it is easier than ever to find a side hustle that can fit into your everyday routine. Everyone has a skill that can be monetized. Brainstorm ways that you can make extra money and then go after it.
EXPLORE DEBT CONSOLIDATION: A debt consolidation loan is a type of refinancing that enables consumers to pay off money owed more efficiently. By consolidating debts under one umbrella, you will likely negotiate better interest rates and save significant amounts of money over the long-term. It also makes it easier to pay off the loan if all of your debts have been consolidated into one easy payment. The debt consolidation experts at Dutchess Partners can help to find the best program to fit your personal needs and financial situation.
NEGOTIATE BETTER INTEREST RATES: Although your mileage may vary on this tactic, it is worth your time to call your credit card company or bank and ask for a better interest rate. Especially if you have been faithful in your payments, the lender may agree to a lower interest rate. This is one of the easiest ways to be able to apply more money to the balance of the loan or debt without costing you any extra money.
No matter how bleak your financial situation may seem, there is always hope to get out of debt. With the proper plan and the right people on your side from Dutchess Partners, you can enjoy the financial freedom that you have always envisioned for your life.