There is nothing more miserable than being buried under mountains of debt, and it can seem impossible to become debt-free when you start to think about it. The process of paying off your debt fast isn’t for the faint of heart and requires hard work and some sacrifices on your part. Despite that, let’s not be discouraged before we get started. Putting in the effort will enable you to do it quickly, and even if it may seem impossible at times, it can be accomplished
Simple tips on how to become debt-free FAST!
Know what you owe.
You will not be able to say with confidence that you have paid all your debts if you are unsure how much debt you have. Thus, we should start by figuring out one big number. Upon reaching this amount, you will have finished your long-term payment goal. An annual credit report can help you with this first step.
Visit annualcreditreport.com to obtain your credit report. They allow you to request your credit reports from all three bureaus once a year. In order to be sure all your debt is included, you will need to request information from all three lenders before you begin to pay off your debt.
Set a debt-free goal date
When beginning the process of debt repayment, many people make the mistake of not setting a goal date. This may be fine for some individuals, but for the most part, we need a firm deadline as motivation. Before you begin, make sure you have an accurate idea of how much debt you have, so you can set a short but realistic goal of being debt-free in a short time.
In this step, you will analyze your budget and see how much you can actually afford to put towards the debt and how long it would take if you paid just that amount for the duration. Setting yourself a deadline will create a sense of urgency; use that motivation to keep on track!
Reduce all possible expenses
It is also advisable to reduce as many of our expenses as possible as a part of our journey to becoming debt-free; especially if we do not have a lot of excess income to redirect to our debt each month. In this situation, sacrifices must be made as well as strict budgeting.
If possible, make your morning coffee at home, reduce how often you buy fast food, and call your cable provider or insurance company to see if you can get discounts on things like the internet or car insurance.
Reach out to creditors
The fact that some creditors actually negotiate the entire amount of your debt with you is not commonly known. You can use this secret to your advantage! It is common for you to end up owing much less than you started with through these negotiations. You will only be able to determine whether a creditor is willing to negotiate if you contact them.
Remember, however, that contacting them will result in that statement being moved to the top of your credit report. You may see a ding on your credit score as a result. If you’re happy with how your debt is managed without negotiation, you can skip this tip.
Use the Snowball Method
Although Dave Ramsey popularized the Snowball Method of repaying debt, it remains one of the most effective methods for working off debt, even if you don’t like his methods. In general, the process is pretty straightforward. You should begin paying off debt by making the smallest monthly payment on the smallest debt.
Then, you pay the next smallest installment, ensuring that the previous monthly payment is rolled over into the new one. Due to the rolling over of previous payments, you will be able to pay off debts with high monthly payments and not suffer too much from it in the long run.
Pay every spare penny
Paying off debt quickly requires you to be generous with the funds you spend to pay off your total debt. In other words, every penny of extra money you have should be put toward your debt repayment campaign until you are debt free. You will have to pay off your debt far longer than you really want to if you do not throw extra money at it.
Remember that you can always find a side hustle to help you earn extra money. A little extra effort may be worthwhile if you are really committed to getting out of debt as soon as possible.
Track your progress
The following may seem like common sense, but it’s still worth mentioning! If you get burned out and tired of the work involved with paying your debts, having a tracker on hand can be an extremely motivating tool. Seeing how far you’ve come can really motivate you to keep going when you feel like giving up. Depending on how much or how little you want to do, this can be extensive or simple.
Graphs and boards can be helpful for some people. A simple blank thermometer hung on the wall will suffice for others. Make sure you hang it in a place where you will often see it to maintain that motivation. While you pay off your debt, remember that you are getting closer to being debt-free with every payment!
Understand the journey
No doubt, you’ll experience some level of discouragement from time to time as you work toward paying off your debt. Especially if you’re trying to pay off your debt as quickly as possible instead of taking your time. The process can be time-consuming, tedious, and even heartbreaking at times. It’s going to make you jealous if your friends can “live the life” because they’re not worried about their debt.
In fact, you may find yourself wanting to quit or simply angry about the fact that you’re in debt in the first place. At the end of the day, if you find yourself feeling any of those negative emotions, know that they are 100 percent normal and you’ll get past them! All of it is part of the journey.