When you find yourself under crippling debt, it could feel as though there is no way out. But actually, as long as you maintain a clear head, know what active steps to take, and put together a plan of action, there is no reason why you cannot eventually pull yourself out of debt.
Here are six powerful approaches that could work for you.
1. Look at Ways to Save Money
If you are experiencing a high level of debt and have not looked at ways of cutting your spending, it is high time you did.
For instance, by doing simple things like cutting down on how often you dine out in the evenings, making lunch at home rather than buying it out, not making impulsive purchases, and mending clothes rather than buying new ones, the cash you save will soon mount up and you can use that money to pay off more of your debt.
Get started by making a list of all of your monthly outgoings so you can get a good overview of your expenditures and identify which things you can cut back on.
You might be able to save a much more significant amount than you think.
2. Consolidate Your Credit Card Debt
When you consolidate credit card debt, you can lower your monthly payments and take better control of your debt situation.
For instance, you could save a lot by transferring your high-interest credit card balances to a personal loan that has a lower interest rate and no fees.
3. Double Up Your Payments
Although doubling up your debt payments may not be as efficient as consolidating your debt, doubling up is a great way of getting rid of your debt faster.
Of course, you will need funds to make higher monthly payments, but it can be more than worth sacrificing your expenditures for a designated amount of time if it means you can significantly reduce your amount of debt.
You may have to live frugally, such as cutting down your grocery budget and never going out for a few months, but when you remember the reasons for taking such actions and you begin to see your debt go down, you will be happy in your decision to live frugally so you can double up your debt payments.
This strategy is known as a debt avalanche.
4. Increase Your Income
Whether you want to double up your debt payments or simply pay off your debt more quickly, you can gain additional funds by increasing your income.
In this day and age, there are various ways of creating a passive income or getting a side hustle.
For instance, you could set up an eCommerce dropshipping business or look for a second job, such as becoming a part of a ridesharing service.
When you find ways to increase your income, you can use all of the extra cash you earn to pay off your crippling debt.
5. Sell Items That You Own
You could also gain access to additional cash to put towards your debt repayments by selling items you own.
For instance, you could sell your car and use a bicycle or public transport to get around instead or you could sell items that you no longer want or need, such as jewellery, children’s toys, and furniture.
6. Get Advice from a Credit Counselling Organisation
If you still find that it is difficult to get out from under your crippling debt, consider getting advice from a professional credit counselling organisation.
You will then be able to better understand the best tactics to use for your specific circumstances and manage your debt more easily.
Many credit counselling organisations offer debt management plans to help you reduce the number of debt payments you have to make each month.
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