Get out of debt ASAP
Struggling with debt? Looking to get advice on how to get yourself out of debt? Our Get out of debt ASAP guide will get you on the right track.
Being in debt can be the most stressful persistent problem experienced by anyone. Whether it's credit card debt, car loan debt, student loan debt, personal loan debt or debt incurred more generally via a divorce or other family related issue.
1. Identify all your debts.
The first step in the journey of getting out of debt is facing up and being honest with the debt situation you are in. Once you have a clear picture of the financial situation you can then start planning how to make the situation better. Anybody who tells you it's quick or easy is not helping you, it can be so tough to break habits or be focussed in spending less or being stricter with budgets.
2. Make the minimum payments.
Once all the debts have been identified it's time to look at how they are going to be paid off and this is often the hardest part. To even begin the process of reducing the debts, you have to be able to make the minimum payments on the debts you have. Typically, a salary is the primary source of funds and is likely how any debts have been amassed. Lenders will lend based on a salary and then things get out of hand due to interest mounting up and or other decisions that have not worked in your financial favour.
3. Debt snowball strategy.
With the debts listed, the debt snowball method in essence means tackling the smallest debt first. Every extra penny earned, saved or side hustled should go towards paying off the smallest debt. Once paid off, the repayment amount plus all the extra available then goes towards the next smallest debt and so on. Rolling up the available monies to pay off each debt focussing on 1 debt at a time, continuing to pay off the minimums on all of them. Using this debt snowball strategy and by staying focussed and within budget you'll be able to knock out each debt one by one.
4. Stay focussed and disciplined.
Where most fail and stay in persist debt is by not following a strict budget and not being disciplined with spending. When even the smallest amount of breathing room has been made with finances, it's easy to think a cheap treat won't hurt or you deserve a reward for the progress made so far. The truth of it is, that mindset probably helped get you into the financial difficulty you face and the treat will ending up costing 10x more than you imagine by slowing the progress and paying more and more in interest. The reward for clearing the debts will be so much more satisfying and likely better value for money when received with no debt hanging over you.