So you’re in an insurmountable debt problem.
You’ve tried to climb your way out of the debt hole (fast), and nothing seemingly works.
When your phone rings, its calls you don’t want to take because it’s either family, friends or a debt collector on the other end trying to recoup their money. And the calls come every day.
If you have accrued over $50K in debt on your own, you can quickly get out of it in less than a year. It won’t be easy though, but these 20 things will help you achieve your goal. Learn how!
Put your stuff on sale
The idea is to make money fast to pay off your huge debt. So selling off unwanted crap or unnecessary household belongings for money is a good start. Sell everything you hardly use anymore – make sure what you’re putting up for sale is valuable to bring in a substantial amount of money.
There are many avenues you can sell off your belongings – try a yard sale or putting up your stuff online for sale on eBay, Craigslist or even Facebook.
The best part? You get instant cash when you make a sale. The sad news? You’ll soon run out of stuff to sell over time. If this happens, try something else like … working extra hard.
Find a second stream of income
You’ll need to find a second job if you want to generate enough money to help pay off your debts (and bills). Getting a second stream of income is an option you can consider as you’ll earn extra money to pay off your debt, and still have enough to pay your bills and buy food.
One thing you need to realize, though. Working extra hard is no fun. Working on an extra job is not easy, but it eventually pays off. If this doesn’t seem like a route you want to pursue, then think smart. And work even smarter to increase your income.
Increasing your income requires a smart move like finding a higher paying job. Or getting a promotion at work. However, if all these fails think up viable business ideas to pursue so as to earn more money to clear your debts.
You can draw inspiration by looking through the fastest-growing companies in the US, and a good number of successful Inc 5000 companies. Learn how they work, read about their secrets, and how they achieve success through smart business ideas.
Then come up with a viable business idea and create your own company. It’s possible. But motivation is half the battle. You need to find tools to help you get out of debt as well.
Employ functional tools to get you out of debt
If there are available tools you can use to get out of credit card debt, by all means, go for them. Try to understand the credit system and how it functions, especially if you have a scorching credit score rating.
The system can get you back into good books even increase your score. What if this doesn’t work for you? Figure out what really got you into huge debts in the first place.
Get your money facts straight
You have to know how much you spend each month, and even understand where all your money goes If you want to break out of a vicious debt cycle, let alone pay off debts.
You’ll be surprised to know few people even understand how they got into debt, or how they spend their money each month, and what they get from spending all that money. If you can’t get your money facts straight, reduce your expenses.
Downsize (to your level best)
You won’t make more money by just understanding where your money goes or living in a smaller apartment or driving a less expensive gas consuming vehicle.
You need to scale down. Reduce all your expenses if you’re to make any significant progress on reducing your debt. Cut down on parties, eating out, cable TV, cell phone service, etc. If you find it hard to reduce your expenses, contact your creditors and ask for a deal.
Negotiate with your credit card company
Your credit company wants to see you making payments – even little payments. When you do this, they trust you. It’s then easy to strike a deal even ask them whether they can accept minimum payments than what you owe.
Automate your payments
You don’t have to physically send out a check to your bank or lenders to pay off your debts. Automate your payments to avoid the “I forgot to mail the check on time” excuse. It’s a healthy starting point toward your journey of remaining debt-free.
If you find it difficult to automate your payments, then know your financial story and background before you get into debt. Or if you’re trying to eliminate debt out of your life.
Know your money story
Everyone has a different money story. How you view money is not how your relative or spouse will view theirs. Some people grew up attaching emotions on their money, others surround theirs with feelings. Some people are heavy money spenders, others love to save money.
Learning your money story and background will help you manage money well and ensure you don’t get into more debt. Communicate your money story with a life partner or family member and ask them to hold you accountable for your spending. This can greatly help deal with huge debts, and if it doesn’t, keep emotions away from your money (if you can).
Don’t get too emotional about money
When dealing with money – particularly huge accumulated debts – approach the subject from a logical standpoint. Remember it’s a high-pressure situation already – thanks to the initial shock of accumulating huge debt. So, it’s easy to get emotional and less logical in the process.
The moment you put in emotions, you become vulnerable and less mathematical. Just get into action mode right away and think about how to get out of your current debt.
Track every penny
It’s impossible not to get emotional about money – especially when trying to get out of a huge debt – if you zero ideas on how much you earn or spend every month. Start tracking your finances to aptly determine all your expenses. Have a plan on how to track every penny.
Determine your debts
How deep are you in debt currently? Is it worse than it actually is on the surface? Find out the whole truth about your debt. Disclose the total amount of your debt (to yourself) … from student loans, credit card loans, auto loans, $5000 easy approval loans taken from nation21loans.com, rent, utility bills – everything. Put it all out in the open then come up with a plan.
Allocate money for expenses
Once you determine all your debts including expenses, set aside money to deal with all the expenses. And be tough on yourself while at it. Make sure to distribute all your money on bills that need to be paid right away. Then include a plan on how to deal with huge expenses later.
Pay off your debts
You’ve probably planned to pay a minimum amount towards clearing your debt. The best strategy is to pay more than the actual minimum you’ve set yourself. This will help you pay off your debts faster than earlier perceived.
Stay committed to the snowball method
The method works like this: You pay off the least of your debts first, regardless of the interest rates accrued, to create momentum (akin to a snowball rolling down the hill).
When you start paying off the smallest debts, you’ll be motivated to attack even higher debts with the same momentum especially when you see yourself clearing off debts a lot faster.
Stick to good money habits
If you’re used to eating out, prepare home-cooked meals to save money. If you love going out for movies or entertainment with your family, get movies and watch them at home.
You can practice other good money habits besides this. However, it’s all easier said than done. Cut down on your frugal habits, employ the snowball method, and you’ll soon get out of debt. Practicing good habits won’t feel like a struggle over time, but an empowering achievement.
Grow your income
If you have a hobby explore it, turn it into a business. Read and learn about how to make it work. Learn how it can actually bring you some income on the sidelines. And from each penny your hobby earns, you can channel it toward paying off your debt. This is a slow but tested and proven way to cross the debt-free finish line in a year or so.
Come up with a budget
Want to be debt-free? Then plan how you use your every coin. Track all your finances and develop a budget you can actually follow. This may seem like a no-brainer, but few people track and budget their money before actually spending it.
Avoid using your credit card
It’s challenging to use cash for everything especially if you’ve used a credit card all your life, or at least half of your life. But new habits can be learned especially when you want to get serious about paying off your debt within 12 months. Paying everything with cash helps you avoid getting into credit card debt that eventually gets you knee-deep into serious debt.
Do what it takes
Make small but powerful money changes into your life that will result in the most benefits. Small changes, for example, can come in the form of confiding in a close friend and ask them to keep you accountable for every spending you make.
This seemingly small changes can have adverse effects on your financial life. Then again, having someone you can confide in about your money creates a strong support system for you that helps you quickly get out of debt.
You can do this!
Yes, you can actually get out of a $50k debt in less than a year – if you’re willing to put in the work and time for achieving such a feat. But most importantly, you can choose to employ any of the 20 financial tips to enjoy the financial freedom that currently seems a distant away.
Sit yourself down, discover what money habits need changing, and then change them. And you’ll soon be on your way to paying off your huge debts. You can do this.