If you have debt chances are you’d like to pay it off quickly, and I don’t blame you. Debt can drag you down and suck the fun out of life. So, if you would like to learn how to pay off debt quickly, read on.
How to Pay Off Debt Quickly
Whether you want to pay off debt quickly so you can save to buy a home, or take a big trip or just live without the shadow of gloom that debt can be, here are 6 ways how you can pay off debt quickly.
So, here we go…
1. Throw extra cash at the problem – Chances are sometime in the year you will get a bonus or a raise or at the very least a tax refund.
When you do, don’t spend it. Use it to pay off debt.
The tax refund is easy. Just use the entire thing to pay off a credit card or apply it to student loans.
The same goes for any bonus you may receive at work. Often, these come during the holidays, so don’t be tempted to spend the money on gifts.
Chances are everyone in your life already has everything they truly need.
As for a raise, have the extra money immediately put in another bank account. You can then dip into this money every few months and use it as a lump sum to pay off debt.
If you do it this way, you’ll never miss the money in the first place.
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2. Sell unwanted items – Most people have houses or apartments full of unwanted or unneeded items.
Now is a great time to sell them. Whether you want to throw them up on eBay or Craig’s list or have a yard sale, get them out of your house and free up some room.
You’ll also end up with extra cash in your pocket that you can use to pay off your debt.
When it comes to how to pay off debt quickly, this is one of the easiest ways.
If you don’t think you have anything to sell, look again.
Also, don’t forget that one person’s trash is another person’s treasure, so don’t assume no one would want to give you money for that ugly Christmas sweater or that vase you got as a wedding gift ten years ago from Aunt Judy.
3. Get a second job – This isn’t my favorite idea as I’m sure you are busy enough but don’t dismiss it outright.
Even a few hours a week can provide you with a decent amount of cash to use to pay off debt, and when it comes to how to pay off debt quickly, sometimes we have to do things we don’t really want to do.
If you use all of this second income to pay your debt, you’ll see a huge difference quickly.
Make sure this second job is something that is stress-free. This is especially important if you have a stressful full-time job.
The job doesn’t need to be glamorous and while you might not love it, just keep in mind that a little short-term extra work will pay off big sooner than you realize.
4. Find a side hustle – While this is related to a second job, in my humble opinion it is a little better because you’ll be working for yourself. When a lot of people think of a side hustle they think of working online and that’s certainly an option.
However, if you’re not the kind of person that is tech-savvy or you don’t like to write, then don’t forget about everything you can do offline.
For example, you can make money doing almost anything. You can mow lawns, deliver groceries, clean houses, the list is endless.
The great thing about this is you can choose your own hours and how much you want to work.
5. Work overtime – If you have decided one job is plenty, thank you very much, then instead of finding a second one or creating one for yourself, check with your employer to find out if you can get some overtime work.
The advantage here is you already work there and you know the lay of the land, so to speak.
If your company is short-handed, then they will be thrilled to help you out and might even give you a raise in the long run for being a team player.
6. Rent out a room – If you own your own home and have an extra bedroom, you might want to consider renting it out. It would give you a steady monthly income to help you pay off your debt.
A few hundred dollars extra a month can help you pay down your debt pretty fast, and the great thing about this is you don’t have to work more than you do now.
Now that we’ve covered some ways to bring in extra money, let’s get into some of the other things you can do when it comes to how to pay off debt quickly.
Taking Your Debt Pay Off Plan to the Max
Now that you’ve found a few ways to bring in extra money, you want to have a plan to pay off your debt as quickly as possible.
If you just start throwing your money at your debt without a plan, you will start to get frustrated and before long give up. So, read on for more on how to pay off debt quickly.
1. Pay off your credit cards first – You want to be sure to pay off any high-interest rate debt first.
This is typically going to be credit card debt but could also be a payday loan or title loan.
Those must be paid off before you do anything else. You’ve got a couple of options to do so.
One, you can use your extra money, each month, and apply it to the card with the lowest balance until it is paid off and then go to the next card, and so on.
The second option is to consider debt consolidation.
These are personal loans that allow you to consolidate all of your high-interest debt into one payment.
The two main advantages of debt consolidation are that you only have one monthly payment which is usually lower than your multiple payments, and you will be paying a much lower interest rate, so you will end up with less to pay off in the long run.
2. Cut your budget to the bone – If you are serious about paying off debt quickly then you need to live like it. This means cutting your expenses back to the bare minimum.
Will it be fun? No. Will you like it? No.
Will you be able to pay off your debt a whole lot faster? YES!
So what does this strict budget look like? No eating out, no cable TV, no Starbucks, eating a lot of rice and beans – heck that’s no hardship they taste great – no outside entertainment that costs money.
You get the idea. It won’t be fun, but just think how much more you can enjoy life when you have your debts paid off in full.
When it comes to how to pay off debt quickly, you’ll have to throw in a little hard work one way or another.
No two people are exactly alike, and no two people have the exact same life situation, so my advice is to read through these tips again and then sit down and decide what works for you.
Here’s an action step for you: Make a list of what you can live with and can’t live with. That includes ways to make money, if you can sell off anything, and how deep a budget you can stand.
Then you can take steps to make it happen.