We all want to pay off our debt as quick as possible. But the reality is paying off debt, especially if you have a lot of it, is not a quick or easy process. We live in a world where instant gratification is everything. Unfortunately, that’s something you just won’t get when it comes to paying off debt. However, there are some small steps you can take that will help you pay off your debt faster and give you small wins. Check out these five great suggestions:
Pay as much as you can afford
Your credit cards, loans, and all other debts all have a “minimum payment” that you must make consistently every month. A lot of time we just pay that minimum and that’s it! However, you should always pay more than the minimum whenever you can and strive you pay as much as you can afford. Even if you only pay an extra $50 on your monthly payment, that can add up to be a lot. It’s important to remember that interest is charged whenever you don’t pay the full balance from your previous billing cycle. If you reduce that balance even just a little bit, that means you’ll end up paying less in interest.
Make cuts to your spending
It is extremely important to analyze your spending and determine where you can make some cuts. I guarantee you there are things you are wasting your money on (more about that in our post here) that you can cut out and put towards your debt. Recently, I went through our expenses and noticed that we were paying $11.99 a month for Hulu – but were never really using it because we had other streaming services as well. I made one call and cancelled it and now we have an extra $12 a month to put towards paying off our debt! That means we’ll be able to pay an extra $144 towards debt by the end of the year.
Earn some extra money on the side
If you have the time and the flexibility to do so, considering picking up a part-time or seasonal job! Last holiday season I took on a retail job making $9 an hour to earn some extra cash. I only worked two days during the week (two 4 hours shifts) after my regular full time job and one shift on the weekend (one 10 hour shift) for a total of 18 hours a week. I made an extra $162 a week (it was a little less due to taxes and such) which really helped us earn some extra money to pay down some debt and buy presents for family and friends for the holidays. The retail discount I got from it didn’t hurt either.
Sell or return what you don’t need
I have a brand new pair of puma sneakers sitting in my closet that I bought two months ago and never wore. I bought them because I thought they were a great price and looked nice. The reality is I didn’t really need them as I hardly wear sneakers and that’s why I havn’t used them in the past two month. Therefore, I’m going to return them to the store this weekend. That’s an extra $25 that will be returned to my credit card and will help lower my balance. I also recently went through a few closets in my house and found a few items that I wasn’t using anymore. I did a garage sale (get more details about putting on a great garage sale here) and made $378 from selling these items. All that money went straight towards our debt.
Ask for a lower interest rate
If you have a few different credits cards, you’ll probably notice that some have higher interest rates than other. Most of my credit cards have an interest rate of between 14% and 18%. However, there is one credit card in particular that I’ve had since I was 18 years old and I didn’t realize that is had an interest rate of 26%. No seriously, it was 26%. All this time I’ve been paying 26% interest and had NO IDEA! So, I called the credit card company and basically said that I was considering doing a balance transfer to a different credit card because my interest rate was too high. After some back and forth, they offered to lower my interest rate to 18% to keep me as a customer. They didn’t need to check me credit or anything! It was that easy.
As I said before, paying off debt is not a quick or easy process. It takes hard work, dedication, and comes more easily with time. What’s important is that you make small strides towards your goal each and every day. By choosing to implement these five strategies, you are making small steps that will help accelerate your goal to become debt free slowly, but surely.