Making A Marathon Feel Like A Sprint
There are a lot of reasons people want to get out of debt fast. Getting out of debt and repairing your credit can help you move forward with your life, making it possible to make big purchases like home and vehicles. As well, the stress of debt is no picnic. For most people, the sooner you can get out of debt, the better.
Payments Determine How Long You Stay In The Red
When you’re paying off debts it’s important to balance your payments. The more you pay off each month, the less time it takes to pay off the debt. But, with that in mind, you don’t always want to maximize monthly payments.
You need to have a balance. You don’t want to pay off so little that you stay in debt long term. This will also result in paying more interest, so you’ll spend more overall. But you don’t want to pay so much that you risk going into further debt.
Tips For Lifting Your Debts Faster
Getting out of debt requires money, effort, and time. Let’s take a look at how to get out of debt faster.
Budget
Come up with or review your monthly budget. It can help to start with two budgets. One that shows your current spending habits, and another that contains just the necessities (ex. Groceries, rent).
Comparing these can see where you can save money by downsizing and removing unnecessary spending. As well, you can determine how much you can afford to put towards your debts each month.
Maximize Payments (Within Your Budget)
Paying off the most you can afford on a monthly basis will help you pay off your debts fastest. Use your budget to determine how much you can pay without risking putting yourself into further debt. The more you pay, the sooner the debt goes away.
Prioritize High-Interest Debts
Not all debts are equal. The higher the interest on a debt, the more of a priority it should be. These cost more long-term and are best to pay off ASAP. Allocate more to paying off these debts than to lower interest debts.
Reallocate Paid-Off Debts
Once you pay off a debt, that shouldn’t free it up for casual spending. Yes, it’s a moment to celebrate, but not with a spending spree. Instead, reallocate the payments you were making on that debt to double up payments on another.
For example, let’s say you have two credit card debts and you’re making $200 per month payments on each. Once you pay off one card, up the payment on the other card to $400/month. This will literally double the speed that you pay off the debt.
Once you’re debt-free, consider re-allocating those payments (at least in part) to some type of savings plan. You can get it working for you with retirement savings, or even put it towards a well-deserved vacation.
Seek Out Credit Card Debt Relief Counselling
A counsellor can help you figure out the best approach to paying off your debts. They will help you figure out the best way to pay your debts quickly and sustainably.
The Side-Hustle
If you can pull it off, a side job is a great way to speed up your debt relief with minimal financial strain. Doing freelance work or finding part-time work like Uber-driving or Foodora delivery can get you the extra cash you need on your own schedule.
Keep your health and priorities in check while determining how much time to spend on side jobs. Sacrificing too much sleep or family time can put a lot of strain on you. Instead, time spent watching the game or whiling away the night on Netflix could be put to better use with a side-hustle.
Don’t Cut Out The Things You Love
When you build your budgets it’s tempting to cut everything out. But, especially if the debt will take a long time, this is a sure path to misery. Yes, you should cut out most of your frivolous spending. Your favorite things, however, are what keep you going and make the process easier.
For example, a yoga membership can be costly. But if it’s something important to you and that helps you feel mentally and physically well, it’s worth holding onto. It can be good to shop around for a lower price, but it’s better to enjoy it.
Another example is going out with your friends or family. This time is important for your happiness and wellbeing. It’s better to simply reduce your spending on these excursions than to cut them out entirely.
When you set your budget you’ll have to make some sacrifices, but you don’t need to remove the things you love.
Debt Relief Doesn’t Need To Be A Long-Term Plan
When paying off your debts, you don’t always have to be in it for the “long haul.” A debt counsellor can help you get out of debt quickly and safely. They will help you weigh your options and create the best plan for your specific needs.
Contact a counsellor today and get out of credit card debt faster.