Ending one year and beginning the other while buried in debt is stressful at best. When you’re finances are in the red and you feel overwhelmed with money woes, it can be hard to consider that there might actually be a solution. In fact, there are several steps you can take to relieve your personal debt crisis. No matter what the severity of your financial situation, there are changes you can make to immediately start turning your finances around. Try some of these six techniques for paying off debt to decrease the amounts you owe, while increasing the amount you earn.
- Cut Extra Expenditures to Save Money. It’s possible that you don’t consider going to see a movie or buying new clothes to be extras, but when you’re swimming in debt, every bit of savings counts. Watch movie rentals at home, and invite friends over for a potluck dinner instead of meeting at a restaurant. Take any money you save over the month and put it toward your debt.
- Raise Cash with Unwanted Household Items. Do you have unused and unwanted items lying around the house; CD’s you never listen to, DVD’s you never watch? Put them to work for you by selling them online or at a consignment shop. Rather than holding on to clutter that’s of no use for you, you can clean out your home and earn money to help pay down debt.
- Consider Credit Consolidation. If your debt is really out of control and spread across too many accounts to keep track of, a debt consolidation plan might be the best option for you. There are many reputable credit consolidation companies on and off the internet; be savvy and choose a company that doesn’t charge high fees to help you straighten out your finances. Once your debt is consolidated, you can begin to manage it with one monthly payment, instead of several overwhelming payments.
- Unique Ways to Raise Your Income. Getting a second job or selling items isn’t an option for everyone. Fortunately, there are other options for raising money to pay off debt. Put your talents to work for you by offering to tutor or participate in medical trials to raise extra cash.
- Pay More than the Minimum Balance Due. As you build up your income stream, start paying more than the monthly minimum balance. This will help you chip away at the principle amount owed and reduce the amount of finance charges you pay over the life of the debt.
- Pay Off the Lowest Balance. Write out all your credit balances, starting with the lowest amount. Work toward paying that one off as quickly as possible. Once you’ve accomplished this, add the amount you were paying to the next lowest balance and work toward paying that one off. The accumulation of payments will help you get your credit in order quicker than you can believe.
Once you begin putting these techniques to work, you’ll soon feel a reduction in stress just from knowing you’re doing something about the problem. Avoiding debt problems by pretending they’re not there won’t make the situation better. Tackle your financial state head-on with these steps to help you lower your bills and raise your income to create a more secure financial future. Consistently working toward paying off your debt will help you transition from financial disaster to financial freedom.