Getting rid of your debts may be easier than expected.
- Consumers go into debt for a variety of reasons.
- If your debt is hurting your mental health, it’s time to make a plan to get rid of it.
- The first step is to put yourself on a budget.
Some people end up in debt because life isn’t going their way – they lose their job the very month their car breaks down and lands in the ER with a costly bill. Other people end up in debt because they spend too much or are forced to spend money they can’t afford (think attending destination weddings).
No matter why you got into debt, it could end up being extremely stressful for you. And it’s not healthy – not financially or mentally.
If your debt is wreaking havoc on your well-being, it’s time to tackle it before it causes you more harm. Here’s how to do it in four steps.
Step 1: Set a budget
Having a clear idea of what your monthly bills look like should make it easier to cut back on your expenses and create more room for savings — savings you’ll use to pay down your credit card balances. Make a list of your various bills and figure out where there is room to cut fat. That could mean canceling cable for a few months or skipping your weekly Friday night dinner at a restaurant with friends.
Keep in mind that any budget changes you make don’t have to be permanent. Just keep them in place until your debt is gone.
Step 2: Determine which debts are costing you the most
It’s a good idea to pay off your debt from the highest to the lowest interest rate. If you owe money on multiple credit cards, rank them from highest to least expensive interest rate so you know which ones to tackle first.
Step 3: Check if consolidation is an option
Consolidating your debt could make it less expensive to pay off. And also, it could be good for your prospects.
Imagine juggling four different credit card balances. It can be a lot mentally. If you are able to consolidate these different balances into one personal loan, for example, it could make it easier to deal with this debt. Plus, you might get a lower interest rate on this personal loan than what your credit cards are charging you.
Another option is to consider doing a balance transfer. Often you will enjoy a 0% cast rate if you go this route, which could make it easier to get out of that hole.
Step 4: Take action to increase your income
The more you are able to increase your income, the faster you can get rid of your debt. If there are opportunities to take extra shifts at your main job, ask for them. And if that’s not an option, consider getting a side hustle, whether it’s doing door-to-door telemarketing or looking after people’s pets on the weekends to earn cash. money.
Heavy debt could really get you down. If this is the situation you find yourself in, follow these steps to get out of it as soon as possible. It could really do wonders for your prospects as well as your wallet.
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