Being in debt is usually not a pleasant experience. Many of us who are in debt would do quite a few things if they could be released from their financial obligations. As it turns out, there are quite a few techniques you can use to dig yourself out of this hole.
10 Tips to conquer debt
1. Get a Good Balance Transfer Credit Card
A good way of tackling your debts is to find a balance transfer credit card and consolidate your debts into a single balance. You would apply for a BTCC with a bank and if approved, they would settle all your debts with your creditors and all your obligations will then be with the bank.
This is a very ideal situation for those who get approved because not only is having a single balance and monthly payment a lot more convenient, but it will also result in a lower interest rate than you averaged previously which frees your budget up quite a bit.
2. Pay Your Mortgage Off Early
Instead of following the current payment plan for your mortgage, which is normally stretched out over 15 to 30 years, you might want to consider paying off a chunk of that principal ahead of schedule. This will usually require some short-term austerity for you to come up with this sum.
The benefits however, are long-term and compound with time. You can shave many months and even years off of your mortgage payment schedule and even potentially qualify for re-financing at a lower rate because of the reduced balance.
3. The Magic of Debt Snowballing
Simply put, debt snowballing involves tackling your debts systematically. First, you make the minimum payments on all your debts for obvious reasons. After that, take all the extra payments you were making on your several debts and concentrate them on a single debt balance, usually the one with the highest interest rate.
After you have finished off that debt, simply take all of the money that was going to it and concentrate on the second debt. Keep this going until you have wiped out your debt balance entirely. Doing this can save you years of payments and thousands of dollars in interest saved.
4. Negotiating With Your Bank
Sometimes, especially if you have a debt with a very high interest rate, it might make sense to see your bank and try to work out a deal. The thing to remember is that banks really want you to pay them back, and if they can see that you cannot with the current scenario but can if things were changed, most will meet you somewhere in the middle.
All it takes is for you to muster up the courage to walk through those doors to get the conversation started.
5. Invest Simultaneously
Another way of going about things is to invest your surpluses whilst paying off your debts. This is done by paying off one or two debts as quickly as possible and use the money that was previously going there for investments.
This is very doable since you were already budgeting for debt service already, but now you are going to be paying yourself.
6. Stop Adding More Debt
This might seem like a no-brainer, but this really bears mentioning simply because too often people find themselves on the path of financial salvation, only to be dragged back down because they relapsed and took on another debt.
Avoiding this takes a good amount of self-discipline and mental iron to push away the temptations of short-term gratification in exchange for long-term glory.
7. The Art of Couponing
If you are struggling to make ends meet currently, something has to give. Instead of sacrificing something such as piano lessons for the kids, perhaps you should look into the possibility of couponing.
This is more of an art than a science, but is nonetheless extremely helpful to those who explore this option thoroughly. Simply look around for big discounts on everyday grocery items and take full advantage of them.
8. Eliminating Cable
Cable services can sometimes really eat into your budget, especially when the promotional period expires and you do not even realize it. It might be a big shock to the family initially, but ending your cable subscriptions might be something you need to do.
Instead, you can subscribe to streaming services that are sometimes only a fraction of what a cable subscription would cost.
9. Eat at Home
This is another no-brainer that most of us are still guilty of doing. If our budgets do not permit it, we do need to stop eating out, at least temporarily. This might sound a little harsh, but desperate times do call for desperate measures.
Not only is eating at home way more financially prudent, it is also a lot healthier. No matter ho healthy you think you are at a restaurant, you must remember that they want to make their food taste as good as possible and will usually sacrifice your health to do so.
10. Make Your Own Coffee
Many of us who get coffee at our favourite coffee house have no idea how much that habit costs us every month. If you sit down and calculate how much you spend on coffee, you will probably be in for a shock. Instead, try getting yourself a coffee maker and start making your own cup every morning. You’ll be surprised how slowly your checking account gets reduced from that.
