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Ways To Pay Off Debt Faster

Ways To Pay Off Debt Faster

If you have more than one debt, it’s quite possible you are so busy trying to meet your minimum repayments that you don’t think about how you are paying off what you owe. This could leave you carrying around these financial obligations for much longer. Debt doesn’t have to be inescapable. Leave them behind with these tips on how to pay off your debt faster.

Examine your relationship with money

Why do most people have a complicated relationship with money? This could be a symptom of a deeper problem. Mostly, people use money to feel better for a while, which affects their financial happiness for the worst. 

Just like any relationship, you must examine the status of yours with money. Are you:

  • spending it correctly? 
  • throwing it away? 
  • using it to cope with larger issues?

Bet you could find a lot of reasons to make that next purchase. If your obligations pile up for all the wrong reasons, it can lead to a vicious cycle that’s hard to break. To move forward, you need to acknowledge this issue. 

Know how much debt you carry

It’s better to know how much you owe for you to pay them off effectively. Gather all paperworks relating to your financial commitments such as overdue utilities, credit card statements, outstanding loans, etc. to add up exactly how much you owe. Write it down and put it somewhere visible to serve as your target. 

Make a repayment plan

Once you know how much debt you’re carrying, make informed repayment decisions. You need to make a repayment plan, in which you can consider these options: 

  • The debt snowball method. The snowball method works by targeting your smallest debts first towards paying off your largest debts last. 
  • Debt settlement. It involves offering a lump-sum payment to your creditor in exchange for a portion of your debt to be forgiven.
  • Debt management. A credit counseling company negotiates with your creditors to lower your monthly payments or reduce your interest rates and fees. 
  • Debt consolidation. Consolidation cuts down the number of payments you have to manage. To pay off your other loans, this program involves a new loan that carries a lower interest rate than your other debts.

Cut up your credit card

Because credit cards provide convenience, it can easily be used even for smaller expenses. Overtime, these small purchases add up, with you falling into a catch-22 unnoticed. And before you know it, you’re in trouble. 

So, leave your credit card behind or cut it up. Use cash instead. You’ll be more accountable as you see the cash slips through your hand.

Make extra money

Consider a few of the following ideas to make more money: 

  • Pay rise or promotion. If you’ve been waiting, now’s the time to make a move to ask for a pay rise or a promotion. 
  • Turn a hobby into extra pay. Do you have a hobby? Perhaps you’ve been complimented on your craft projects. Turn these hobbies into money makers via Etsy, Gumtree, or Facebook groups.

If you liked our “Ways To Pay Off Debt Faster” and find it useful, check our blogs regularly for more info on how to get out of debt and updates on the best budgeting apps in Australia.