People are forced to confront financial ruin when disasters strike, such as an unexpected job loss or a major auto repair. On top of that we have obligations such as car payments, and credit cards that we can’t seem to get ahead of. The best way to stave off financial disaster is to reduce or eliminate those debts. Generally the fastest ways to get out debt are the hardest. Here are 4 that work.
The Snowball Method
If you’re able to pay more than the minimum, consider speeding up the process. Write out a list of all your debts sorted from smallest to largest. Pay all the spare cash you can toward the smallest debt while continuing to pay the minimum on the rest. As you get each debt paid off, you’ll have that much more cash to apply to larger debts.
Live By a Budget
If you want to pay off debts even faster, you’ll need more cash. Draw up a budget listing your monthly expenses. Look at each item on the list and look for a way to eliminate or reduce that expense. If you go to a restaurant or club every weekend, consider staying home, or only going out on alternate weekends. Find ways to reduce electric and grocery bills and shop for cheaper insurance. You can always find a better deal out there if you look hard enough. Even clipping coupons out of the paper can make a huge difference.
Many people still cringe at the word, but it’s the fastest way to eliminate debt. Bankruptcy has to be filed with the courts, and approved by a judge. Federal debts such as taxes and government-funded student loans are not cleared by bankruptcy. You may have to sell certain possessions. Every situation is different, so if you go this route, consult an attorney to get a good idea of what you can expect.
Reform Your Habits
If you’re still coming up short, it’s time to gather your receipts and look at every dollar spent. Often we have small expenses we take for granted, but they add up. If you spend money on lottery tickets, cigarettes, or junk food, do your best to stop or cut back. Get in the habit of reminding yourself of your debts and put the money back in your pocket. Every time you are about to buy something you don’t really need remember what else that money could be going towards. Every little cent helps.
No matter what kind of debt you have, there is a way out. Curb your expenses now. Get a second job. The faster you can pay off those debts, the faster you can get back to spending that extra money on things that make you happy. Just make sure to remember that every little bit of money helps out and makes a difference. Follow a strict budget, set goals and don’t give up!
This is a guest post by byKara Masterson. She is a freelance writer from West Jordan, Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max. Kara recommends Bankruptcy Attorney K. Hunter Goff as a great resource to help you get out of debt.