11 Ways On How To Get Out Of Debt

How To Get Out Of Debt

Getting out of debt is surely not an easy task, unless you win the lottery, you’ll be stuck in debt if you don’t do something about it. But before we tackle how you can get out of debt, let’s talk about how most people get into this unfortunate situation and maybe you could avoid doing their mistakes.ways on how to get out of debt

Common reasons why a person get into debt:
  • Using credit card/s irresponsibly
  • Getting too many loans
  • Being unable to pay off loans/bills on time
  • Borrowing a large amount of money with a high interest rate
  • Unexpected medical expenses

So, what if you already made those mistakes, how can you get out of debt and live a debt-free life of your own at some point in time?

If you have that question in mind, here are some answers for you…

11 Ways To Get Out Of Debt
  1. Assess your finances
    The very first thing you should do to help yourself get out of debt is know how your finances are doing. By doing this, you will know where to start and get a hold of your situation. It’s common to have a bad financial life whenever you got yourself debts, so it’s not the end of the world if you would find out that your finances are in a mess. Think of it as a challenge to do better than a failure on your part, it would be much better that way, don’t you think?
  2. Talk with a credit counselor
    If you’re in trouble and you don’t know what to do, then the best way to find out what to do next is talk with someone knowledgeable enough about your current situation. A credit counselor can and will help you sort things out when it comes to your debts. He or she would give you options on how you can get out of debt and you could choose the best one that fits your current situation.
  3. Make a budget
    Ah. Budget. You’ve heard that word before, but for some reasons of your own you did not have one or decided not to follow what you have made in the past. It’s up to you if you would make the same mistake again, the only thing that I could tell you is that having a budget would be a great help for you to get out of debt. If you want to know how you can build the right budget plan for you, read my previous article below.

    How To Make A Budget Plan That Is Perfect For You

  4. Live well below your means
    Living a fancy life that you’re struggling to afford will only lead you to take on more debt, so the right thing for you to do now is live WELL below your means. You don’t want the interests to keep piling up for each passing months, don’t you? So, try cutting on some of your household expenses like your cable, so you can save some money and pay off your debts immediately.
  5. Get more sources of income
    Your day job will not be enough in covering your daily needs and at the same time pay off your debts, so getting a second job is necessary. Unless you get promoted and get an increase in your salary, you will have to do this to pay off your debts faster. Some of the best second jobs you could take are online jobs, where you could work even if you’re at home.
  6. Try to negotiate
    Talk with the person/s or institution/s whom you have debts and try to negotiate a better deal with them, you could ask if they could lower the interest, or just simply stop putting interest on your debt from now on until you paid all of it. If they do agree on that, then that would be great for you. If not, then you should try harder in negotiating with them.
  7. Pay the debt with the highest interest rate first
    This one is very good strategy to follow, because you’ll end up paying the low-interest debts last. Determine your debt with the highest interest and start with that, after you finish paying it off proceed to the second high-interest debt and so on.
  8. Pay more than the minimum
    If you’re only paying the minimum amount, then you’re doing it the wrong way. It’s going to take a very long time before you get out of debt if you do that, so try to ALWAYS PAY WAY MORE THAN THE MINIMUM from now on.
  9. Pay on time
    Paying late would cause you money because of the penalty fees, so make sure that you’re paying on time and paying more than the minimum.
  10. Avoid impulse purchases
    You don’t want to add up more debt, so avoid buying items out of impulse. You’ll just be wasting money and you could even make things worse for you. Just use that money to pay off your current debt/s first.
  11. Build your own emergency fund
    Some may have gotten into debt because of emergency and immediate expenses, that’s why having your own emergency fund is a necessity, rather than a luxury from now on. This could really help you to avoid getting yourself into debt whenever something unexpected happen.
    If you want to know more about emergency fund, read these articles below.

    What Is An Emergency Fund?

    7 Ways To Save For An Emergency Fund

Those are my ways on how you can get out of debt, if you have any more suggestions that you personally do to get yourself out of debt, why not share it out below and let your fellow readers know about it.

To give you more useful information, here are other articles around the web that I found that could also help you get out of debt.

Other great articles that can help you get out of debt:

5 Things You Shouldn’t Do With Your Credit CardModest Money

Tips For Paying Down Your Debt FasterThe College Investor

Interesting Ways To Make Money Each MonthSee Debt Run

3 Steps To Eliminate Impulse SpendingBudgeting In The Fun Stuff

Secrets To Helping You To Get Out Of Debt QuickerFrugal Rules

Photo Courtesy of Alan Cleaver
About the Author

Hello! My name is Mark and I'm the one responsible for this website. I'm just a person with enough knowledge about finance-related stuffs. You can know more about me by liking my Facebook Page, following me on Twitter or by adding me in one of your circles on Google+.

Comments

  1. I got into debt because I was depressed and buying things made me feel better about my self and my situation. Unfortunately, buying things wasn’t the solution and only provided me a temporary high. Once I was honest with myself as to why I was spending money I was able to stop adding to debt every month and begin to pay if off.

  2. I will add also to use cash every time you are buying stuffs or groceries. This is to avoid the overspending. There is a hurt feeling if you are handing your cash to the cashier.

  3. Hey Mark, great write up here. I love that you mentioned negotiation as a viable option. I’ve walked tons of people through debt. Once we get a good idea of what is going on, the first step is usually to try and negotiate interest with the lender to reduce payments. It’s shocking how often it works! Thanks for the great read!

  4. Most of my debt comes from trying to supplement my income during a short period of time while I was out of work. I literally lived off my credit card for two months. But these are great tips and I plan to use them although avoiding impulsive shopping will be a challenge. lol

  5. I agree that having an emergency fund is vital if you’re paying off debt. I never had one before and when bills cropped up that I wasn’t expecting, I just got into debt again. It’s so much easier when you have an emergency fund even if it’s only a small one!

  6. Being honest to yourself is the first step. Once you acknowledge the real situation you are in you’re already one step ahead. Do not handle this journey alone. You need to talk to someone who is financially literate and has already made a significant progress as well. This is very important so is making a budget and emergency fund. Kudos for the great post!

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