Simple ways to pay off debt fast
We all know how overwhelming and stressful debt can be. Some of you may be wondering how to pay off debt. There’s no better feeling than paying off all your debt and reaching financial freedom.
Maybe you have student loan debt or credit card debt- whatever it is you want to pay debt off quickly. If you’re anything like me, you want that debt paid off as soon as possible! Being able to pay off debt is such a relief. The more you pay off, the closer you are to reaching financial freedom!
This post is all about super easy ways to pay off debt.
1- Have a Plan
Before you tackle your debt you need to fully analyze your finances, set a financial goal and timeline for your debt pay off. Figure out how much you make a year, when you want to pay off your debt by, and how much you’ll pay a month to achieve that goal.
This plan should help you stay motivated and focused on paying off your debt in the timeline that you set for yourself!
2-Pay the right debt first
There are a few different methods to paying off debt, the snowball, avalanche or a mix of both. You have to decide which strategy will work for you. You need to analyze your debt and what your budget is for paying off the debt.
The snowball method is paying off the smallest debt first and working your way up to larger ones. So if you have two credit cards- one at $2,000 and another at $6,000, you want to pay the smaller credit card off first which would be the one at $2,000.
The avalanche method is paying off the highest interest debt first. When tackling your debt, you want to make sure you are paying off the high interest debt. For example, you have two credit cards- one at 25% interest and another at 18% interest. The card at 25% interest should be your main focus on paying off.
When you pay the higher debt first, it gives yourself room to put funds towards the actual debt principal, rather than having to cover additional interest expenses overtime.
3- Pay more than the minimum
If you are only paying off the minimum balance due each month, you are going to have a difficult time paying off the debt. If you have a ton of debt, the minimum balance might not even cover the interest fee charge every month.
The less you pay now the more you’ll pay later. This is why it’s so important to pay off more than what the minimum balance is each month.
4- Stop living off debt
If you are in debt you need to stop living off debt. If you are relying heavily on your credit cards and maxing them out regularly, it is time to adjust your spending. Credit is not meant to live off it. If you can’t afford it do not put it on a credit card. You should only be using a credit if you are able to pay it off immediately after.
Credit cards can be super dangerous if you don’t use them wisely. You can get too comfortable relying on them, and within a few swipes later you are in a downward spiral of debt.
You’ll never be able to pay off your debt if you are constantly swiping your credit card to cover all of your expenses and luxury purchases.
5- Add income streams
Building additional income streams means bringing in more money. Bringing in more money mean being able to pay off more debt. See where I’m going with this?
If you’re working a 9-5 and your only income is $40,000 a year and you have $60,000 in debt, it’s going to be so difficult to pay that off quickly. No matter how much you cut down on expenses, not having additional money to pay off debt may seems almost impossible!
I always think it’s a good idea to have multiple income streams so you aren’t just relying on one. You never know when you may lose that only one! I like the idea of having a side hustle. Read my post on 44 legit side hustle ideas to bring in over $1,000+ a month.
Having that additional $1,000+ a month can totally help pay off debt. It gives you more wiggle room to pay off your debt while still living by your own means.
This post was all about how to pay off debt quickly
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Great tips! Totally agree with paying more than the minimum to avoid letting it snowball. Thanks for sharing!