Somewhere along the line in your life, you have spent more money than you have. That’s why you are reading this today. The reasons can be many, and it doesn’t really matter, so long as you are willing to make this right.
These following are time test advices for people in debt:
- Pay off debts starting at the highest APR
I know you have heard a lot that it’s good to close smaller loans first while you pay little towards the larger ones. But monetarily, that is a disaster waiting to happen. You need to sort your loans in order of APRs. Then throw most of your money to the one with highest APR while paying minimum in the rest.
- Use a portion of your savings to pay debt
If you are in serious debt, it is unlikely you have any savings. But you may come across some money during the holidays, birthdays or settlements. Use 80% of this money to pay off debt.
- Sell what you can live without
Do you need all your jewelry, TV, juicer, toaster, a subscription to the NY Times? List out things in order of last when you used them. Sell whatever you didn’t use in the last year and see how much money cops up.
- Take up a side hustle
There is no limit to what you can do part-time to earn some extra cash. And if you do take up a side hustle, immediately separate that from your regular earnings so you don’t lax out on the savings and repayment. By working part-time on the local fast food joints on weekends and holidays you could earn a couple hundred bucks. Hey, and free food too!
Learn more at debt free life for the best tips and tricks to save up while paying off debt. Getting out of debts is not easy, but it’s not impossible.