Having debt and trying to pay off debt is one of the most stressful things a person goes through in their life. According to NBC, sixty percent of Americans state that debt is a “significant source of stress” in their lives. To help reduce your stress and anxiety, one of the best things that you can do is to start paying off your debt and making a plan to be debt free.
There are many different forms of debt that a person can accumulate throughout their life. Some of the most common forms include student loans, credit cards, car loans, and home loans. While some forms of debt, like a mortgage, will often take twenty plus years to pay off, there are other forms of debt that you can start to pay off now. Here are some of the best ways to help you get out of debt fast.
#1) Write Down All Debts
One of the best places to start if you are looking to get out of debt is to first make a list of all the debts that you currently have. Most people have different lenders and different loan holders. Start by creating a spreadsheet of all the different loans and debts that you have. Write down the lender’s name, the current amount of debt that you have with them, the minimum monthly payments, the current interest rate, and any other critical information that you have about the specific loan.
This spreadsheet will help you create a plan. Certain factors, like interest rates, will help you determine what loans to pay off first.
#2) Create a Budget
Once you track your expenses and income, create a budget that you can stick to. Make sure that you are at least making the minimum payments on loans and saving as much as possible. If you miss a monthly payment, you will only fall further into debt. Avoid this at all costs to keep you on track.
#3) Seek Help from a Financial Advisor
After you have created your spreadsheet of current debts, you need to create a budget for yourself and your family. Try to track your expenses and income for one to two months. You can use your budget to find areas that you are spending too much money on. For instance, instead of eating out three nights a week, try to limit it to once a week. Small savings each week can help you pay off debt faster.
If you are struggling to create a budget and pay off your debts or are simply looking for the best financial strategy for your individual situation, you may want to consult a financial advisor for help. Most financial advisors are trained to help their clients get rid of debt. They can look at your finances and your budget to help you create a plan to reduce your debt.
Financial advisors will often give you tips to stay on track and to help you pay off your debts easier. They may provide you with options for refinancing, consolidating loans and switching lenders. They are experts in their field and have great knowledge for every situation.
#4) Track Your Progress
You need to track the progress that you are making each month. While the burden of debt will take time to pay off, it is important that your monitor your progress and track every dollar that comes off your total debt. This can help boost your confidence and will help you look for ways to reduce your debt quicker.
For instance, you may notice that one loan has a much higher interest rate and is barely changing even when you make all of your payments. By tracking the total amount that you owe for every loan, you can start to see which loans need to be paid off first in order to help you get out of debt. Celebrate all victories and use them as motivation to continue on your journey to living a debt free life.
#5) Avoid Getting in More Debt
If you are looking to pay off your debts, it is crucial that you avoid getting into more debt along the way. If you cannot pay for something with the money that you have in the bank, try to avoid buying it at all. Reducing your spending and avoiding taking on more debt will help you achieve a debt free life.
Being debt free is one of the most freeing and exhilarating feelings that a person can have. Try using these tips to help you achieve a debt free life. Paying off your debts now will give your greater financial freedom in the future and allow you to have the life that you want and deserve.