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Actionable Tips for Paying Debt Off Quickly

how to become debt free on a low income one hand pulling out an empty pants pocket with the other hand holding a small amount of change Middle Class Dad

If your debt worries you, you aren’t alone. Most adults worry at least a bit about what they owe. To that end, here’s a quick look at a few tips that you can use to free up a bit of cash in the budget and give your income a bump so those debts can be paid off a bit more quickly. 

Debt Consolidation

Utilizing a company such as Hawkeye Associates to roll multiple debts into a single payment that typically gives you a lower interest rate can make debt both less expensive and easier to manage. The less interest you need to pay, the more you can pay towards the principal balance. 

Getting a debt consolidation loan is a great option to accomplish this.

The better your credit score is, the better terms you’ll get, so keep that in mind. Also, it may be helpful to realize that a credit score is just one of the things that lenders look at. It’s important to know though that debt consolidation loans have different binding agreements depending on where you are in the world. If you are in Canada, you can check this guide:

Reduce Spending

Each and every dollar counts, so reducing your spending is always a good idea when you’re trying to pay off your debts. Cutting down on expenses, like ordering delivery for your dinner while you catch up on the streaming TV, or trading up for the latest and greatest phone every time a new one comes out can quickly add up.

Consider what you might give up in order for you to become debt-free and then do it.

Stop Using Credit Cards

One way to keep your debt from growing as you work on paying it off is to stop using credit cards.

Keeping the debt from growing also means that you’re keeping it easy to manage. Refraining from adding to your credit card balances while you pay down the debt will also assist with improving credit utilization that is a factor in your credit score. The lower this number is, the better your credit score will be.

Side Hustles

Getting a side hustle is one way to scrape together a bit of additional income so that you’ll be able to increase what you can pay on your debts, making your time to pay it off quicker.

Make sure you’re looking into side hustles that are legit. There are jobs that you can complete in under an hour, such as testing apps and websites. Other side hustles, such as freelance writing, can take a bit longer, but they can earn you a bit more cash in the long run.

Know When to Stop

Finally, you need to realize that there are times when debt gets to be a bit much. If you find that you’re having difficulties with making the payments on your debt and the amount of your debt is more than half of what you make in the space of a year, you may want to think about getting a bit of help from someone.

Debt relief options, such as the debt consolidation we talked about above, to nonprofit credit counseling agencies, and even bankruptcy, might be able to give you the alleviation that you need in order to move on past what you owe. Weigh each one of your options before making any sort of decision.

Paying off your debts might take years, and it may even get in the way of any other financial goals you might have, such as buying a house or saving for retirement, but it’s also called taking responsibility for your actions and will reflect well on your credit score while also teaching your children good money habits. 

Jeff Campbell