5 Ways to Lower Debt Today
Do you have lots of debts? With all that is going on in the world with the Covid-19 situation, this is understandable. Even in normal times, the average American has around $38,000 in personal debt.
Don’t panic of despair. There are many ways that you can lower debt without living off canned soup or selling everything you own.
Take a deep breath and do the math. Here’s how to get out of debt on a low income.
Table of Contents
1. Pay Off Credit Card Debt Quickly
One of the easiest ways to lower you debt is to pay off your credit card debt quickly. Don’t fall into the trap of only paying of the minimum each month. Your interest will continue making it seem more of a mountain to pay it off as the months go by.
The best tactic is to pay off your credit cards as soon as possible. Do the maths. Figure out how much you have spent on them and the interest and then work out how much you can pay back every month realistically.
Set this money aside as soon as it comes in. If you have a digital or Fintech bank then place it in a digital vault where it can’t be touched and only withdraw it when your repayment plan comes around.
If you pay off too on your credit card each month then you could find yourself unable to pay off other bills or without the money to eat. So it’s important your goal is realistic.
Consider canceling your credit cards if you have a tendency to use them inappropriately.
2. Reduce Everyday Spending
Hey big spender! It’s time to get your finaces under control. If you’re the sort of person who goes into the supermarket with a list of what they want to buy but comes out armed with lots of goods you never even realized you needed then it’s time to try and get your habit under control.
If walking into shops doesn’t work for you then instead do your shopping online where you won’t be tempted by other objects around you.
Moreover, you can always see what your total bill is rather than waiting until you’re at the checkout when it’s too late and awkward to explain to the cashier that you’d like to put some items back.
3. Consolidate Your Loans
If you’re like the average consumer then you’ll no doubt have a couple of credit cards with different perks for different stores, your car is properly on finance and maybe you’ve even paid for the furniture in your house on credit. This can make your loans seem overly burdensome.
You could instead try consolidating your loan which is also known as low interest debt consolidation. This is one of the key ways that you can lower your debt to help you get out of it faster. Be sure to learn more now to reduce debt. If you can see your debts clearly in one monthly sum then you can organize your finances around this rather than simply reacting to them each month. This can also reduce your stress.
4. Downsize Your House
Another way to get rid of your debts is to downsize your house. If your debts are so big you may feel you are living above your means. Decide if you can live with a smaller house or if you really need the house you have now.
Could you live without a second bedroom? Or would that be too much for you. If you bought a two-bedroom house anticipating that you would have children but changed your plans perhaps you could go back to a one-bedroom house.
With the money, you save you could pay off your debts outright and live an easier life. This is only going to work, however, if you change your behavior so that you don’t get into this level of debt again.
If you are renting is there a cheaper place you can get. With the Covid-19 situation, there might be some more affordable options for you. Be sure to do your research and shop around. Wondering how to lower credit card debt quickly? This is how.
5. Ditch the Car
Another step you can take is to give up your car. Cars are bad for the environment and they cost a lot to run. But they also deplete rapidly in value. If you buy a car for $5,000 then it could be worth just $1,000 in a few short years. You would then need to afford to buy a new one.
Consider alternative methods of transport. If you live in a big city like New York consider using the subway. If public transport isn’t an option then you could think about using a service such as Uber.
Uber often has offers for those who want to book a regular service, reducing the overall cost. There is also Uber Pool, a carpooling service where you can share your ride with others. You can sometimes find rides for as little as a few dollars. A private carpooling service is also an option.
There Are Many Ways to Lower Debt
If you are thinking about how to lower debt and live a healthier life not worrying about all your credit cards and loans then relax. Sit down with a calculator and a spreadsheet and figure out where all your big spends are and how you can reduce them.
Calculate your overall debt and decide on an action plan to consolidate or reduce it that you can afford each month and that isn’t overwhelming.
If you are interested in learning more about how to lower debt or low interest debt consolidation then be sure to check out the rest of our site.