Tell me one of your goals this 2023. Is it a new car? Lots of travels? Or probably to get out of debt? For many adults, happiness can come from something as simple as getting out of a debt slump! And that is true! Being free from such responsibility (or, better yet- burden) can provide a huge relief! So whether you maxed out your credit card when you were younger or lapsed in paying your bills, let me share five tips to get out of debt.
Debt Management: 7 Ways to Get Out of Debt
#1 Watch your spending
Let’s start with your income because our spending capability and budgeting will be based on this. Identify how much money is entering your stream each month and keep a log of it. Consider this the base of our activity!
#2 Track your expenses
Now that we know our monthly income let’s start tracking the expenses. I segregate them into buckets: utilities, rent, food, savings, etc. It would also help to create a record of these expenses via a Google Sheet or a budget app! This way, you’ll see how much you allot for each type of expense, deduct it from your income, and see the extra income to pay off your debts; then, you are on the right track!
#3 Know your wants vs needs
Of course, we do more than work to pay the bills. We work to live and enjoy life. But wait, I am not saying we should also go all-out to the point of being irresponsible. That might have been the cause of the debts in the first place, right? Yes, it is also possible to enjoy while paying off debts. Identify your wants and needs. Obviously, the wants can wait and be held off, while the needs are our bills and money to pay off the debt!
#4 Look for side hustles.
In this age, it is easy to look for additional income, especially if you are internet-savvy! Gone are the days when we only relied on our monthly salaries to live. While hustling is unnecessary, it is best to look for additional income!
#5 Leverage Your Skills
How about leveraging your skills, like doing an additional online job? There are several options for side gigs that you can do offline. One of which is doing commissions for your artwork. This is perfect if you are crafty and artsy. Another gig to look at is food service. Start small with family and friends, and let your connections grow! You must know what you are good at and make money off it!
#6 Sell Your Stuff
It is nice to consider a minimalist lifestyle these days. And by doing so, you are not just decluttering; you can also make extra cash off of it. Sort out things you are no longer using, identify if they can still be sold, and start a garage sale. Or, if you don’t have a garage, post them on an online selling platform, and you’ll be surprised with just how much money you can earn from selling stuff you are no longer using. Use this extra cash to pay off your debts!
#7 Negotiate with your bank
Lastly, if you had difficulty settling your debts in the past but can do so now, it is best to talk to your bank about it. Consider asking for an amnesty to arrange an agreement for a more doable payment schedule that will not break your budget each month. Most often than not, banks are very open to these!
These tips will help you to get out of debt this year! Another solution is to borrow money from a friend or an institution to help you pay it off. Just don’t get yourself into another debt slump, okay?