7 SIMPLE TIPS TO GET OUT OF DEBT
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Last Updated ON: 01/09/2024
Are you trying to get out of debt? As we know, getting into debt is easy, but getting out of debt can be difficult.
Here you will find simple and easy-to-follow tips to help you get out of debt.
1. ORGANIZE YOUR FINANCES AND CREATE A BUDGET
Before doing anything, it's important to organize your finances and create a budget.
Need assistance with budget creation? Learn how to do so here!
The easiest way to organize your finances is to view your statements to see how and what you spend your money on.
Then list all of your expenses. You can use a budget planner or a notebook to track your expenses.
Next, look for ways to reduce your spending and eliminate what you do not need.
2. SAVE $1,000.00 FOR AN EMERGENCY FUND
Most people think that when they are in debt, they should automatically start paying off all of their debt, but this is untrue.
After you organize your finances and have a realistic budget, you must build an emergency fund.
Before paying off debt, you should save at least $1,000.00 for a rainy day. Need help building an emergency fund? Learn how to start an emergency fund here!
3. MAKE MORE THAN THE MINIMUM PAYMENT
If you want to get out of debt fast, make more than the minimum payment. One of the easiest ways to do this is to list all your debt from smallest to biggest.
After, start making minimum payments on all of your debts. Whenever you have extra cash to spare, use it toward your smaller debts. Rinse and repeat until all of your debt is paid off.
4. STOP WASTING MONEY ON THINGS YOU DON'T NEED
To get out of debt, you must stop wasting money on things you don't need. Instead, become intentional with how you spend your money and assign a job for every dollar that you spend.
How do you stop wasting money on things you don't need? Below are a few ideas to get you started:
Use cash only when shopping.
Plan all purchases.
Use a list whenever you shop.
Eliminate costly membership that you don't use.
Eat more home-cooked meals.
Meal prep your food and make your own lunch at home.
Reduce or get rid of your cable bill.
Reduce the number of times you eat out.
Shop sales.
Compare prices before shopping.
Use downloadable and printable coupons.
Use savings apps for discounts.
5. SALE UNWANTED ITEMS THAT YOU NO LONGER NEED
If you have items you no longer need and they are in good shape, you should consider selling them. Have a yard sale and use the money you make to pay off some of your debt or put the money toward your emergency fund.
The best thing about yard sales is that you can sell just about anything. You can sell clothes, baby items, furniture, books, kitchen tools, etc.
And if yard sales are not your thing, you can easily use an online platform such as Facebook Marketplace or eBay.
6. MAKE MORE MONEY AND INCREASE YOUR INCOME
Getting out of debt can be challenging, especially if you have a low income.
To improve your financial situation, consider developing new skills or leveraging your existing ones to increase your earnings.
How do you make more money?
Begin by creating a list of activities that you enjoy, are skilled at, and excel in. Next, determine which one is the most fulfilling and lucrative. Finally, devise a strategy to launch your side business.
To give you some ideas, check out the list below:
Start a blog and turn your passion into an income
Become a Freelancer
Babysit in your spare time
Become an Uber Driver
Do Uber Eats
Get a Seasonal or Part-time job
Become a Tutor
Take Surveys
Start a YouTube channel
Become a Virtual Assistant
Sell Bake goods or Start a Part-time Catering Business
7. SET REALISTIC FINANCIAL GOALS
Do you have realistic financial goals? Having attainable financial goals is essential when trying to get out of debt.
Below are some most important financial goals.
Short-Term Savings
Long-Term Savings
Retirement Savings
College Savings Fund If You Have Kids
Life Insurance
Review Your Budget Often & Adjust When Needed
Live Below Your Means
Develop a Money Mindset
Track Expenses and Saving Progress
To Summarize:
1. ORGANIZE YOUR FINANCES AND CREATE A BUDGET
2. SAVE $1,000.00 FOR AN EMERGENCY FUND
3. MAKE MORE THAN THE MINIMUM PAYMENT
4. STOP WASTING MONEY ON THINGS YOU DON'T NEED
5. SALE UNWANTED ITEMS THAT YOU NO LONGER NEED
6. MAKE MORE MONEY AND INCREASE YOUR INCOME
7. SET REALISTIC FINANCIAL GOALS
IN CONCLUSION
Getting out of debt can be challenging, but clear written goals and a realistic budget will help speed up the process.
First, focus on organizing your finances and creating a budget.
Then, focus on building an emergency, paying off debt, increasing your income, and setting realistic savings goals.
