In today’s society, it is hard to stay away from debt. People go into debt every day to help pay for college, medical bills, or to purchase a new home or vehicle. Everyone has different reasons why they are in debt. Even though the reasons are different the solutions are the same. Anyone can get out of debt with the following tips.
Create a Budget
Creating a budget is a good starting point to getting out of debt. A budget allows you to see a number of things. First, it gives you the chance to calculate how much money is coming in and how much money is going out. With the help of a budget, you will be able to see the area where some of your money is being wasted. A simple budget can help you to reveal that you are overspending and help to set boundaries. With financial boundaries, you can prevent yourself from falling deeper into debt.
Redirect Your Spending
With the help of a budget, you are now able to identify where all of your money is going. If your budget allows you to see that you are spending an excessive amount of money on entertainment, then you have the chance to redirect that spending. $200 a month on entertainment can be cut tremendously. For example, if you pay $200 for Direct TV then you could consider downgrading your Direct TV package or canceling your service altogether. There are a number of streaming television services that allow you to watch live TV or movies with a click of a button. These streaming services can provide you with an ample amount of entertainment choices while helping you to cut your entertainment bill in half. The money that you save can be used to pay down your debt.
Make Extra Money
One way to make more money is to get a part-time job. The monies gained from the part-time job can be utilized to pay down your debt. If you don’t have the time to get a part-time job then you can speak to your boss about a raise. In the event that a part-time job or a raise is out of the question, take the time to go through your home and take inventory. The inventory list can help you determine what items in you need to keep and which items you can do without. Old toys, clothes, electronics, and jewelry can help to provide you with extra money to pay down your debts. Such items can be sold on eBay or during a yard sale.
Another way to make extra money is with the stock market. There are two ways you can make money in the stock market, one is by trading and the other is through investing. Trading allows you to see gains or loses quickly while investing gives you the chance to watch your investment grow. Whichever route you choose, both can be used to make more money and increase the amount that you pay towards your debtors.
Get Your Accounts Refinanced
Paying high-interest costs on existing debt obligations makes your debts become expensive and sometimes a heavy burden to pay. This makes the debt troublesome to pay off. When a debt is hard to pay off, it can cause an individual to have more fees added on in the event that he or she misses a payment. In order to find relief and to assist you in helping to pay your debts down, you can reach out to your debtors and request a lower interest rate. Some may think that refinancing only allows a person to save pennies. Well, this is a horrible misconception. If you currently have a $100,000, 20-year mortgage at a 5% interest rate, then you can save about $804 annually if you refinance your mortgage to a 3.75% interest rate. The amount of money that you save by refinancing can be used to pay extra on your mortgage each month. Paying an extra $804 on your mortgage can save you about $13,000 and shave years off of your mortgage.
Learn to Stretch a Dollar
Some of us may not be able to refinance our interests rate but we can learn to penny pinch. Growing up, I was taught that pennies make dollars. With that in mind, it can be beneficial to save a few pennies here and there. For example, instead of purchasing brand products, purchase a couple of store brand items. Choosing a store brand product over a brand name can save a couple of dollars for each product substitute. These couple of dollars can add up and within a month’s time, you possibly could save a hundred dollars or more. That money could be used to pay down your debt.
How Confident Are You With Your Finances?
44% of Americans don't expect their financial situation to improve this year. Don't be one of these people! Download my free guide, 10 Ways To Feel Financially Confident Today and get access to steps you can implement ASAP for results