Being knee-deep in debt can be frustrating. However, all hopes aren’t lost. You can try smart and effective ways to get yourself out of a lot of debt.
In this article, we list the most useful and effective ways to get out of debt. The first step is for you to accept that you need to do these things so you can save yourself from debt.
If you’ve done that, let’s dive right in.
1. Find a Side Hustle
Consider your skills. If you have decent Photoshop skills or have a way with words, you can find a freelance gig and earn extra cash. Companies are now embracing the gig economy, and you’ll surely find a side hustle that pays well if you search carefully.
A seasonal part-time job is also good. During the Christmas season, for instance, many shops look for an extra pair of hands to keep the business open during the festivities. In summer, part-time tour guides are in demand.
If you are able and you are skilled enough, there’s a side hustle that can supplement your income. Use the money to help you pay off your debt.
2. Try Debt Relief Programs
Debt relief refers to the re-organization of debt in a way that you can fully or partially repay your debts.
This method can take different forms. But the most common ones are:
- Decreasing the outstanding principal amount either fully or partially
- Lowering the interest on loans due
- Extending the term of the loan
Creditors may consider debt-relief programs when the repercussions are a lot less bad than if you default. This method is available to individuals, small businesses, municipalities, and large companies.
3. Create a Bare-Bones Budget
Another way to pay your debts faster is to cut down on your expenses. You can create and stick with a bare-bones budget at least until you pay off your debts.
This strategy requires you to cut your expenses to as low as they can go and as long as you can.
This type of budget will vary from person to person. Generally, it must avoid any “extras” such as eating out, cable television, and other non-essential expenses. Use the money you save to start paying considerably more to your debt.
4. Sell Things You Don’t Use or Need
If you want to accumulate more cash quickly, you can sell some of the belongings you no longer use or need.
If you can, try setting up a garage sale. It’s the easiest and cheapest way to unload your belongings for money.
And with the advent of faster internet and e-commerce, online selling should be a good alternative. Join social media groups too, or submit items via online marketplaces.
5. Negotiate Your Bills
You can ask for lower interest rates on your credit cards. This is a pretty common habit by cardholders. If you have a solid history of paying your bills on time, you have a good chance of getting a “yes”.
You can also negotiate other bills, including:
- Cable or satellite TV
- Internet service
- Medical bills
- Car insurance rates
- Monthly rent payments
It doesn’t hurt to ask. The worst that service providers can say is no, but the reward can be key to paying off your debts.
6. Change Your Lifestyle or Behavior
Last but definitely not least, change the lifestyle or behavior that got you into a lot of debt in the first place.
It doesn’t matter what the reason was. What matters is you don’t let it happen again. When you change that behavior, you also ensure you won’t go back to square one.
It’s certainly easier said than done, but it’s worth the effort once you start reaping the benefits.