Secrets to paying off your debts

If you have several accumulated debts, you are not alone. Due to the crisis of COVID-19, many people have lost their jobs and have become more and more indebted than ever. In fact, debt can destroy your financial dreams and your personal life.. Whether you have a small balance on your credit card each month or are faced with a mountain of financial obligations, debt keeps you from moving forward.

Paying off debts and credits takes dedication, determination and perseverance. Here are some smart tips to help you get rid of your debt fast.

10 tips for the refund

1. Stop using credit cards

If you're thinking about how to pay off your debts as quickly as possible, start with your debt. credit card. Credit cards usually carry the highest interest rates and it can send your balance spiraling out of control.

The first step is to stop using your credit cards altogether. The more you slide, the more the balance climbs. Even if you continue to use your card, avoid relying on perks like the ability to take cash advances.

Unlike withdrawing cash from your bank account via debit card, a credit card cash advance typically costs you high cash advance fees as well as a high interest rate. Plus, interest charges start accumulating immediately, usually from the day you take out the loan.

Do you have trouble letting go? Literally try freezing the cards in a cup of ice. By the time you can access it again, hopefully you'll have changed your mind about spending.

2. Pay as much as you can each month

How to pay off debt quickly involves simple math. The more you pay, the sooner you will be released from your obligations. Don't just make the minimum payment on each due date, or it will take you forever. Of course, creating an emergency fund should be a top priority.

But once you've reached that goal, use all the funds at your disposal to pay off card debt or student loans. The more you pay, the sooner you will be released from your obligations.

Have you saved money at the grocery store by piling coupons on sales? Use the savings to pay off your debts. Did you work overtime last week? Apply the additional income to your debt.

3. Pay off your debts in rreducing your expenses

Easier said than done, not ? The first step to reducing your spending is knowing exactly where your money is going each month. Ask yourself: Do you spend your money primarily on things you need or on things you just want?

Write down your expenses and divide them into two columns. Obviously, expenses like water, electricity, gas, or your children's school fees should be in the needs column, while cable TV, your next leisure trip, your coffee Daily Starbucks or your dinners at your favorite Italian restaurant should be listed in the second column.

First, identify your most cherished habits and find ways to minimize or eliminate them altogether. Then, slowly but surely, find ways to reduce the rest of your expenses, even the ones you consider a necessity.

For example: Have you compared phone service rates from different providers to find the most affordable? The savings that will accumulate over time will help you get out of debt much faster.

Take a good look at where your money is going and separate necessities from mere wants. Avoid daily visits to the local cafe or your favorite lunch spot. Over time, these savings can add up. Use them to dig the hole much faster than expected.

If you're having trouble figuring out which expenses you can cut, start by setting a budget. Use software such as You Need a Budget to help you define your spending priorities.

A service like billcutterz can help you negotiate lower monthly bills and free up more money to take on debt.

4. Double your payments

Congratulations if you paid just one credit card! However, achieving that goal doesn't mean it's party time. Keep the momentum going by allocating the funds paid to this debt which are now freed up to make payments on the next online balance.

A credit card, when used responsibly, is a great way to build credit, help you meet unexpected expenses, and even finance your business.

But you should do everything you can to pay off your credit card balance in full each month. To get used to maintaining a lower balance, use your credit card as if it were a debit card, setting up an automatic payment to pay off your balance each month.

5. Use deals to pay off sales

If you get a sudden windfall, like a tax refund or a bonus at work, don't splurge on it. Instead, bite the bullet and use some of the funds to pay off debt.

One of the surest ways to pay off your debt quickly is to use the money you receive unexpectedly. For example, when you receive a work bonus for exceptional work or for closing an important deal. Many companies give out bonuses mid-year and at Christmas.

Did you receive a salary increase? Allocate extra money each month to pay off your debt. If you have your own business, a boon could be your tax refund or promotional discounts you receive from your partners. In short, whenever you have an additional source of income, don't waste it on whims and use it to pay off your debt.

6. Freelance to earn extra money

When looking to pay off debt quickly, don't focus too much on saving money. Sometimes the quickest solution is to earn more income. Try your hand at freelancing to earn a few extra bucks.

In some cases, you may be able to generate a substantial amount of cash, all of which should go into the debt repayment fund. Check out marketplaces for freelancers like Fiverr, or consider using your car to earn money by driving for a delivery service like Postmates.

7. Deal with debts with the highest interest rates first

Although some swear that the best way to pay off debt is the debt snowball method — which suggests that you pay off the debts with the lowest balances first to build momentum — it makes more financial sense to clear those debts with the highest interest rates first. THE ultimate goal is to pay off the debt quicklyt, however, the choice is yours.

8. Make your budget

If you've read this far, you're taking paying off your debt quickly very seriously. One of the best strategies you can adopt is to create a simple budget, plain and simple.

A budget goes beyond dividing your monthly purchases into what you need and what you want, as discussed earlier. A written budget will help you analyze exactly where your money is going each month and give you a spending plan throughout the year.

You will be able to more easily identify your objective (in your case, to allocate more money to pay your debts until you pay them off completely) and not deviate from this objective. Check out this article for know how to plan your budget.

9. Accept the challenge with a positive attitude

The truth is that you don't need to give up the best things in life even if you're committed to paying off your debts quickly. Do not face this challenge as a sacrifice. Approach it as a positive change in your lifestyle and bad old habits.

This could lead to a healthier, more balanced routine. Are you a member of an expensive gym? Cancel your subscription and play sports in the park or outside.

Do you usually go out to dinner on the weekends at a fancy restaurant? Learn to cook your favorite recipes at home. Are designer bags and shoes your personal whim? You can find very similar items online at great prices. All the more reason to stop.

These adjustments will not only have a positive impact on your health, but also on your wallet. You'll be surprised how much money you can save to pay off your debt quickly.

10. Sell ​​everything you don't need

Many of us hoard things that we rarely use. Some items you no longer use may be valuable – try selling them. You can use the collected money to pay off your debt faster.

The typical garage sale is one of the cheapest and easiest ways to sell the items you want to get rid of, or you can do it online: eBay, Craigslist, Etsy or LetGo are among the most popular platforms for this purpose.

In summary…

These 10 tips have already worked for many in a situation similar to yours. If you feel that debt is overwhelming you, think that it's not the end of the world and that everything has a solution.

You must have the courage to approach and analyze your particular situation, and to use the techniques that work best for you among those mentioned here. Paying off your debts may require you to make some lifestyle changes, but it doesn't have to be depressing.

If you're having trouble adapting to new circumstances, implement gradual changes so the process doesn't become too overwhelming.

For all your concerns, leave me a comment.