Four Clever Ways to Reduce Debt
Nobody likes debts, but some people, even you, manage to get into them despite the aversion. That being said, it’s counterproductive to just focus on the fact that you do owe someone money. The best way forward is to find ways to erase your arrears and be debt-free and financially healthy. Here are some ways to do just that.
Take Stock of Your Debt
The first step to successful elimination of debt is to acknowledge that you do have them and also recognize how much exactly you owe. This helps you have a clear figure, which informs you of the options or strategies that you can use to erase those arrears.
That being said, list down all your dues. Have you taken out loans? Include the interest rates or other charges in the mix, too. Total everything to get the grand amount of your borrowings.
By the way, after determining your total debts, you should work out how much each month you can pay off.
Consolidate Your Debts
It’s easier and a lot less of a headache to put all your debts together in one credit card, financial instrument, debt repayment option. Transferring your dues to an arrangement that offers 0 interest is a clever move. But f your arrears are too substantial to transfer, as in the case of credit cards, you can just transfer as much as you can so you minimize your losses. Another move you can make is taking out a loan that can encompass all your arrears, which can be a bit more costly. On the upside, you can be sure that you’ll zap all those debts within a certain number of years.
Avoid Getting Into More Debt
Try and pay your bills and credit on time so that you don’t rack up even more dues and affect your credit score. Better yet, you can review your current spending habits and subscriptions and see which ones you can eliminate.
You can, for example, cancel your gym membership and just exercise at home or at the nearby park. You can also downgrade your current utilities. Avoid unnecessary purchases and take advantage of discount coupons and other opportunities that allow you to buy what you need at less the price. You can also opt to buy in bulk so you get more value out of your grocery shopping. You can even give DIY gifts instead of buying them so that you cut your costs.
Boost Your Income and Raise Money
To help you hasten debt elimination, you can engage in activities and strategies that allow you to earn more or have extra money. For example, you can sell the clothing or home items you don’t really use much or haven’t used in the last 6 months or so. You can hold a garage sale for this purpose.
You can also get some part time work to boost your takings. You can sell cookies or pastries on Sundays, for example, or take an Internet-based online job. If you don’t have much for capital, you can offer your services, instead.
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