(Michelle is a guest blogger from Making Sense of Cents.)
A few years ago, I had a large amount of debt. I had around $40,000 worth of student loans and while this may not seem like much to some, it was way too much for me.
Due to the fact that just the thought of having a monthly student loan payment made me stressed, I decided to make an action plan to pay off my debt as quickly as I could.
Whether you have student loan debt, credit card debt, a mortgage you want to get rid of, medical debt, or something else, the tips below can be applied to your situation.
Plus, there are many benefits of paying off your debt. Paying off your debt can lead to you feeling much less stress, being able to retire earlier, help you to follow your dreams because you aren’t being held back by your financial situation, and more.
Below are five tips on paying off your debt.
1. Cut your expenses.
Almost everyone has something that they can cut out of their budget. Whether you are living off of two incomes or you are trying to live off of just one income while also paying off debt, finding expenses to cut out of your budget can really help you in your debt payoff journey.
Expenses that you may want to look into cutting include: any memberships (such as a gym or hobby membership), subscription fees, cable, restaurants, and so on.
Also, if you don’t want to cut anything completely out of your life, you may just want to see if you can negotiate any bills. In most cases, you can. I recommend trying to negotiate your monthly expense for your cell phone, home phone, internet, cable, and more. It doesn’t hurt to ask
2. Make extra money.
There are many ways to make extra money. Whether you want to find a part-time job, start a blog, ask for a raise at your current job, or something else, there are many options for anyone and everyone.
Making extra money is nice because the extra money can all be applied towards your debt. This way you can pay off your debt even quicker and you aren’t really “missing” the extra money because it’s money that’s all designated for debt anyways.
3. Have a budget.
If you don’t have a budget yet, you should create one. Having a budget can help you pay off your debt because you will see exactly where your money is going each month and what you may need to do in order to reach your goals.
4. See if you can lower your interest rates.
Most debt can be negotiated. If you haven’t tried yet, you may want to see if you can get the interest rates on your debt reduced. Even if you can only get it reduced by less than 1%, it is still well worth it!
5. Create a plan.
Now that you’ve read everything above, you should create some sort of debt payoff plan. You may decide to pick and choose what you will do, but that is up to you.
With the tips above, you should be able to pay off your debt in no time.