Let’s face it, mortgages, car loans, and credit card payments tend to creep up on us no matter how hard we try to pay everything off on time. Once we fall into this credit pit, it becomes increasingly difficult to get out of it as time passes. Credit cards are perhaps one of the best and most evil things we have. They are great during emergencies and come in very handy during vacations and when travelling abroad, however, going on a spending spree on one of these things can be quite crippling. Paying off credit card debt isn’t an insurmountable task though. All you need to do is have a good strategy and the rest is a piece of cake!
One surefire way you can write off your debt is by cutting back on your monthly expenses. Take a piece of paper and write down everything you spend money on every month, whether it’s food, amenities, or your weekend hangouts with friends. Now, categorize them into five categories such as Food, Health, Amenities, Entertainment, and Junk. Now, start striking out things that you don’t need out of each of these categories. Your target should be to at least halve your spending in each of these categories. Whatever you save this way can go into paying off your debt. Once you’ve successfully cut your expenses in half, try to find cheaper alternatives to what you are still spending on, and switch. This list serves as a checklist of sorts to help you track your performance and your savings. You can also save on fuel expenses by walking or riding a bike for short trips, or using the bus. You’ll also be healthier with the former! Try to eat in more as well. Restaurant food is okay once a month, but not more than that. This way, you can gradually start paying off your credit card debt faster and better.
Paying Off Debt Is An Investment Too!
If you have some savings or if you are planning to invest some money somewhere, invest it on paying off your debt! It is better to be debt-free when you invest, rather than having to lose all your invested money, while you are in debt. The investment opportunity might not pay off, but paying off your debt definitely will! Make a plan on how you intend to pay off any debt you may have incurred from either cash loans, credit cards or even money borrowed from friends.
The Snowball Effect!
Have you ever noticed how a snowball grows larger and larger in those old cartoons? You can pay off your credit card debt using that same principle. If you owe more than one company or bank, start paying off the smallest debt first. This way, you’ll be able to pay off that debt faster and free up some extra funds to pay the company with the second lowest debt and so on. Work your way up from the smallest of credit card debts, to the biggest of business and caveat loans.
Part Time Freelancing & Consultancy!
Overtime, a second job, or freelancing and consultancy are an excellent way to pay off your debt. You can earn a lot more money this way, and if you do it right, end up with a ton of savings as well after you’ve paid off your debt. If you can handle it, look for other sources of income, anything that you can handle along with your day job. If you are willing to put in the extra effort, you can pay back the debt faster. The internet is an excellent tool for this. Just make sure that you don’t let it interfere with your day job. If you do it right, you can also add this extra experience to your resume.