The Secret To Getting Out Of Debt

| March 4, 2014

More than three-quarters of the world will experience some sort of financial debt at some point in their life. Whether it is a student loan, a home mortgage, credit card debt, or a combination of debts, debt can seem overwhelming.

Debt accumulates interest, and suddenly a small amount of debt has turned into a gigantic problem.

The secret to getting out of debt is simple really, and can be done through these helpful guides:

1. Create An Attainable Time Table

In order to get out of debt, some sacrifices will have to be made. Spending habits will have to change, and more payments will need to be made toward debt.

Making a debt goal will help to keep you on track to becoming debt-free. Budget how much extra you can put toward debt each month, and calculate how long it will take to pay off you entire amount of debt. That date is your end goal. From there, set mini goals within that timeline to keep you on the task at hand.

2. Make The Sacrifices

Sometimes, the extras are what force people into debt. The expense of cable, a gym membership, tanning/salon visits, vacations and expensive travel, eating out, going to the movies, or shopping excessively will add up each month. Any extra expense that is not a necessity should be sacrificed, and the extra money saved should be put toward debt payments.

3. Create More Income

Generating a side income does not necessarily mean having to find a second job. For most who work a typical day job, finding a second job would mean having to work nights, and that is not appealing.

Most people believe they do not have the time to work a second job, but if the second source of income is a side project where you can dictate the hours, you could make at least an extra $500 a month.

From contracting to freelance to opening an out of home business, there are plenty of ways to make a little extra money here and there.

4. Lower Interest Rates

The reason why debt accumulates so quickly is because it accrues interest. While some experts suggest you should pay off small loans first, others suggest paying off the loans with a higher interest rate first.

Those with a higher interest rate do cost a lot more money out of pocket. By paying it off as soon as possible, you could potentially save thousands of dollars.

Because many people cannot afford to pay it off in full, making bi-weekly installments or using a loan to pay off the loan are good options. Bi-weekly payments cuts down on accruing interest and add an extra payment per year. Using a smaller, lower interest rate loan, like a loan from TitleMax.com, can in fact save you money in the long run.

The secret to being debt free is really about discipline and learning how to manage your money properly. With these tips, you will be well on your way to a debt-free lifestyle.

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Category: Debt

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