Currently, we have around $35,000 in student loan debt and a mortgage which I am currently working on eliminating. However, I am more focused on my student loans since they are at a high rate. We also have a car loan, but we only have a loan for the Jeep as it was at a very low rate (0.9%) and would rather invest our money and gain a return since the interest rate is so very low.
Most people nowadays have some form of debt. Could be credit card debt, student loans, a mortgage, a car loan, among many other types of debt. Everyone wants to eliminate their loans right? Eliminating your debt allows for more financial freedom as your income is going to things other than debt, such as your retirement.
Here are some ways in which you can eliminate your debt just a little quicker:
1. Get Rid of Your Credit Cards
Yes, some people are good with their credit cards. I use mine mainly to earn rewards points. However, if you know that you are not good with credit cards, then you should most definitely get rid of them. If you don’t want to hurt your credit score, then just put them out of sight. Do not bring them with you to places so that you are unable to use them.
2. Snowflake Your Debt
This is when you put any extra or unexpected money towards your debt. Did you just earn $25 from mystery shopping?
Put this towards your debt! Any money that you don’t expect to have or that you don’t need (maybe some money that was left over in your budget) put it towards your debt. Every little bit counts and if it’s not money that you’ll miss, then do it!
3. Increase Your Income
Something that we have done is really work on increasing our income. I make a monthly goal to increase our income just by a little bit more each month. We try and put as much of this extra income as we can towards our debt. It makes it easy to put this extra income towards our debt because we wouldn’t be missing it either way.
Also increase your income by looking for ways to increase your main source of income. Negotiate for higher raises, work hard towards work certifications in order to obtain higher positions and so on.
4. Cut Your Expenses
There are probably a couple of things in your budget that you can completely eliminate or lower at least by a little bit. We recently cut our gym memberships, lowered our satellite TV, cell phone bills and internet bill. Usually you can just the companies that you do business with and they will at least shave a couple of dollars off each month.
There are also many other things you can do, such as lower your food spending. Cook at home more, bring your lunches to work and everything else. The money you save on food will really add up quickly.
5. Have a Budget
Having a budget is critical if you are having trouble watching your spending and eliminating your debt. Make sure your budget is realistic and something that can truly be followed. Track your spending and adjust your budget every month as well.
Setting a budget is helpful when you are trying to get rid of your debt for many reasons Designating a limited amount of money each money towards certain categories can help you watch your spending more carefully. You know where your money is going and areas in which you can cut.
What are you doing to get rid of your debt just a little more quicker?