Falling into debt is one of the most overwhelming situations anyone can face. As the interest accumulates and the bills pile up, it’s easy to feel like there is no way out. However, debt doesn’t have to ruin your life.
One of the best ways to figure out how to get out of debt is to listen to advice from other people who have succeeded at improving their financial footing. NerdWallet features the stories of several people who have overcome debt, from a former Olympian who paid off $147,000 in 15 years to the blogger who paid off $72,000 in just 22 months.
Below are some tips the website has gathered from the people who have found a way out from under accumulating debt.
Find your motivation.
Debt can make you feel trapped and helpless, but success stories tell us that finding the right motivation can make all the difference. You may be motivated to get out of debt because you want to improve life for your spouse or children, or because you have specific long-term financial goals. Focus on these motivations to make getting out of debt easier.
Realize that you are responsible for fixing the situation.
In many cases, people who are in debt look for someone or something to help them overcome it. However, getting out of debt requires you to take responsibility for the situation and be proactive. Although it’s fine to ask for help from qualified professionals, you will never be able to get out of debt until you make a conscious decision to work toward this goal.
Get a side job.
If you are already having trouble making your payments, your current job may not provide enough income to get you out of debt quickly. Although you may still be able to work your way out over time, it can be discouraging to watch the balances fall so slowly. People who have been successful in overcoming debt report that getting an extra job can make a world of difference. With the extra income, you can pay down your debts and get back on track much faster.
Make every penny count.
One of the best things you can do to ensure that your debt gets paid off as quickly as possible is to account for every penny you earn. People who have paid off debts recommend making a solid budget that covers all of your expenses. Eliminate any expenses that aren’t absolutely necessary and put every extra dollar you earn toward paying off debts. Remember that your strict budget is only temporary and will allow you to recover your financial standing more quickly so you can afford to spend money on non-necessities, such as entertainment.
Think about consolidating your debts.
Consolidating your debts can allow you to pay a lower interest rate and simplify your monthly payments. In the long run, the right consolidation loan can save you large amounts of money. If you decide to consolidate your loans, be sure to shop for a loan that offers a low interest rate and favorable terms so you can save as much money as possible.
Pay toward the principal.
Whenever possible, make extra payments toward the principal of your debt. Many debts, especially credit cards, require a minimum payment that is composed mostly of interest. Making extra payments toward the principal will reduce your overall debt load much more quickly.
Getting out of debt is difficult, but it isn’t impossible. To learn more about overcoming debt, contact Bunch & Brock to schedule a consultation.
