How To Reduce or Eliminate Debt

There’s this old saying that goes thus, “You can have almost anything you want; you just can’t afford everything you want.” Many people get into debt and remain in debt just because they tend to always spend more than they earn or buy what they want, when they want without a proper budget for it. If you are in debt now and really struggling to make any headway paying it off, then you need some help getting started with a plan. Because, the sooner you start dealing with your debts, the sooner you’ll have it all paid off.

Knowing where the money you earn or make currently goes is a critical step in managing your finances properly to avoid or eliminate debt. In this article, we will be looking at few ways that can help you reduce or eliminate your debt:

• Increase Your Income 

  Come up with ways you can begin to earn extra money and dedicate a reasonable part of it to tackle your debt (s). For example, you could earn extra cash by starting a side hustle like trading, or by generating income from a hobby.

• Set up a Budget 

  Pen down how much money you earn or make weekly or monthly from your primary job and any other side hustle. Note all of your recurring expenses, fixed expenses and nonessential expenses. You can make use of a budgeting software, App or you just create a simple budget with a notepad and pen.

• Sell Some of your stuffs for cash

  Put together a list of your items you can put up for sale. Perhaps, items that you barely use or you can do away with for now just till you get back on track to replace them. Then you use the proceeds to pay down some of your debt(s) to lighten or eliminate your debt load.

• Decide the Debts to Pay Off First

  Prioritize and rank your debts in the order you want to pay them off. Knocking off small debts first can help you build confidence and then you put a plan in place to pay off the rest gradually.

• Consider Getting a Consolidation Loan

  See if your bank can help you consolidate all of your consumer debts into one loan with one payment at a lower interest rate. With a proper spending plan, this loan will allow you to save some money monthly and also keep you from building up new debt while you’re paying off the consolidation loan.

In a nutshell, when you’re eliminating debt or trying to stay off debt, be certain you have an emergency savings fund in place to provide for any unforeseen expenses. Then, strategize on how to pay off your smallest debts first, find ways to earn more, budget well and continually build toward paying off any larger debt you may have faster.

Cheers!