If you’re tired of being in debt, be active in your approach to climbing out. Cutting cable, buying clothes from consignment shops, cooking at home and obtaining cheap car insurance will help you pay off your debt faster. Paying attention to signs of overspending is also an important way to determine if and when you need to make a change. With that in mind, let’s dive in and get you budget ready and debt free.
Make Extra Payments
Even though it might not feel like it at the time, when you make extra payments (even if they are small), you greatly reduce not only how long it will take to pay off a debt but also how much you pay overall. However you can find the cash – whether it’s giving up a regular staple or earning some extra money – put it toward extra payments and you’ll satisfyingly whittle down your debt.
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Consolidate Your Debt
Debt consolidation is a great idea for those who are paying higher interest rates. The idea is to roll all of your debt into one and pay a lower interest rate than what you are paying now. It will help keep your debt in one place and at a lower monthly cost to you – so you can feel more in control of it and work more efficiently in paying it off.
Use the 50/30/20 Budget Rule
Necessary expenses like home and car payments would fall into the 50% of this budget rule. Basically, all essential expenses together should or can take up to 50% of your income. 30% is for your wants, like going out to eat, vacations, and entertainment. The 20% is allocated for savings. If, however, you want to pay off your debt more quickly, you can reverse the 30/20 to 20/30 and spend less on wants and more on savings.
Expect More of Yourself
Do you have skills you aren’t using? Think about where your interests and skills align, and consider taking on a side gig or even opening your own business. You might start consulting, freelancing or teaching. Once you start diving into opportunities available on the internet, you’ll be surprised to see how even an hour or two a week will get you some extra cash to put toward that debt.
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Find Free Entertainment Alternatives
Working your way out of debt is a noble undertaking, but you still want to enjoy life at the same time. You’re still going to want to watch movies, listen to concerts, eat good meals, etc. There’s no reason you can’t do that, it’s more a matter of paring down and changing what you’re used to doing.
- Cut cable and install free streaming apps to watch movies, shows, documentaries, you name it. Sure, you might have a couple of ads but they are well worth the cost savings.
- Depending on where you live, ditch the concerts that you pay good money for and instead, choose from the long list of free concerts that are available. If you reside in the north, free concerts in the winter will be hard to come by but they are everywhere in the summertime. YouTube has plenty of full concerts to watch at any time!
- Instead of going out to eat to your favorite restaurant, find copycat recipes online and make your favorite dishes yourself! You can create a romantic ambiance with subtle mood lighting and music, too.
- Instead of purchasing books and movies, head on over to the library where you can borrow them for free.
Cut Up Those Credit Cards
If you aren’t paying off your credit cards every month then you are essentially making being in debt a way of life. When you cut up the credit cards, you can’t use them, and if your computer and phone remember the digits, take them out. Yes, you’ll want to continue to pay them off but you’re going to get there that much quicker by not using them at all.
Sell Items Online
Nowadays, the Internet is one big garage sale. And there are so many people out there who are just waiting for you to sell your vintage porcelain. Or whatever you have hidden away collecting dust. Dig through your closets, attic, basement, kid’s rooms, etc. and find those treasures to sell on Craigslist, Facebook Marketplace, Mercari, and more.
Plan Your Meals
Making one weekly grocery run and planning all of your meals for the week will save you a lot of money. Think about it, you’re no longer using gas to make a ‘quick’ run to the store. You are no longer faced every other day with impulse buys at the cash register. You aren’t running to the grocery store when you are hungry! Make a meal plan, shop for all that you need, and stick to it.
If you instigate these easy steps, you’ll be that much closer to living your debt-free life in 2023!
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