Paying off debt is hard work. It can be a long process in which you have to practice self-control 24/7 so you don’t overspend your budget or give in to impulse purchases you don’t really need. Trust me!
Luckily even after you’ve mastered the basics, like having a budget and tracking your spending, there are some things you can do to help you pay off debt faster. Here are five simple tips you can implement to help you pay off debt faster.
Choose a Repayment Plan to Pay off Debt
Instead of paying off debt all willy-nilly without a plan, you should choose a debt repayment plan so you know what you should be focusing on whenever you make payment toward your debts. There are several popular repayment plans to choose from, like the debt snowball, the debt avalanche and more.
The key here is to make sure you pick the plan that works best for your mindset and your situation. You can also consolidate your debt through Avant or Payoff to significantly reduce your interest rate and thus save you considerable money.
Make Extra Payments Often
When I first started side hustling to make extra money for debt, I’d wait until the end of the month to apply any extra payments on my debt. Often by the time the end of the month came around, I’d already found other ways to spend that “extra” money instead of putting it toward my debt. I’d end up spending it on extra meals out with friends, or on other fun, but unnecessary things.
When you are in debt, especially high interest consumer debt, you need to get out as soon as possible. One way to help you make extra payments toward your debt instead of wasting your extra money is to make the extra payments often.
Start making extra payments online whenever you have a surplus in your account and you’ll have paid off the next debt on your list in no time!
Make a goal poster, a debt progress graph, or some other visual reminder to help you stay motivated and on-track with your debt repayment progress. Paying off debt is hard, so having a visual reminder of why you are making sacrifices is key to helping you stave off debt fatigue.
Earn More Income
I kind of touched on this one already, but one way to pay off your debts way ahead of schedule is to find ways to increase your income and put the extra toward debt. You might be able to increase your income by asking for a raise, getting a part-time job, or starting a small business in your spare time. Side hustles have become very popular amongst those working hard to get out of debt.
Thanks to my friend J$ from Budgets Are Sexy, we’ve come up with this last one, Challenge Everything! By challenging every expense in your budget you are likely to come up with some extra money that you can put toward your debt.
For example, if you cancel your TV subscription or negotiate a lower cell phone bill, you can put that extra money toward your debt every single month. There are many options to do both, often with little sacrifice on your part. You can switch to Republic Wireless, for example, and get a cell plan for as $5 per month.
Some of these tips might not sound like they’d make too much of a difference, but even paying an extra $5 perweek toward your debt because of some of these methods adds up to be $260 over the course of a year.
Have you used any of these tips to pay off debt faster? What other ways can you think of to help you get out of debt faster? How do you motivate yourself when trying to pay off debt?
Photo courtesy of: Markgraf-Ave