Do you have debt hanging over your head? Does it feel like a huge weight you can’t escape?
If I was to tell you today is the day that we are going to work on becoming debt free, I don’t imagine I’d get a bunch of volunteers jumping up and down to get started with this mission.
Paying off debt is not fun. It can feel frustrating, intimidating, and for some even impossible. But I’m here for you! I’ve gathered up 9 easy and doable tips to help you become debt free.
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Table of Contents
Many people become stressed and don’t know where to start their debt free journey. Student loans, credit cards, car payments, personal loans or any other type of debt can be a significant burden and cost you tons of money in interest.
It seems so easy to spend money, but it begins to catch up to you and you wonder how the heck did I get myself into this debt hole anyhow?
Debt Free Mindset, Lessening Stress
Those who have large amounts of debt to pay off or those wondering how to become debt free on low income may envision the process as daunting and stressful. Thoughts of scarcity and living as an extreme minimalist can creep into the minds of many.
If your debt burden is keeping you up at night, it’s likely causing you more than just sleep it could also be causing you a lot of extra stress as well. Wondering what in the world it would feel like to live a debt-free lifestyle is exciting yet depleting at the same time.
The key to lessening stress caused by debt is having a plan to pay it off. But before you can formulate a debt payoff plan, there are some small steps you need to complete first.
Some people think to become debt free their lives must come to a screeching halt, the life they knew is over until they can dig themselves out of this financial nightmare they have created.
The good thing is this is not true. You don’t have to lose sight of your dreams if you learn the essential tips to take control of your money.
Visualize A Debt Free Life
Ignoring your debt will never make it go away. If you are only paying the minimum amount due on your credit cards it will be nearly impossible to become debt free.
So first thing first, make a list of ALL debt you have. Credit cards, personal loans, car loans, mortgage, EVERYTHING. Make sure to write the TOTAL balance you owe.
The purpose of this isn’t to focus on the minimum payment or the interest rate the purpose is to give you the overall picture of your finances. Having a bit of clarity is critical when trying to conquer debt. It gives you a roadmap of where you are and what you need to accomplish to reach your goals.
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Best Way To Pay Off Credit Card Debt
One of the largest debts many people have besides a mortgage or car loan is credit card debt. Are you one of those people who has been looking for the best way to pay off credit card debt? I am going to provide a
How to pay down credit card debt and still enjoy your life
Enjoying life is what this is all about right? It’s easiest when trying to pay down credit debt if you try to break it down into manageable tasks.
First, let’s think about how you use your credit card. Do you use your credit card for all of your day to day purchases? For some, this can cause problems. I am an advocate for using a credit card for day to day purchases because I enjoy the benefits of my credit card rewards programs.
However, if you are struggling with paying down your debt it may be time to think about a temporary or longterm pause in the use of credit cards. By putting your credit card spending on hold you are more likely to be realistic about achieving your goals.
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9 Strategies For Paying Off Debt
1. Debt Snowball Method
Let’s take a moment and look at all your credit cards and break them down one by one. Do not look at your credit card debt as one large balance because that will be way too overwhelming, instead try the debt snowball method.
The goal with the debt snowball is to begin by paying off small debts first. For instance, if you have 3 cards each totaling $500, $200, and $800 you want to pay off the card that has a balance of $200 first. Once you have eliminated the smaller debts you realize that this is possible and the drive to pay off more becomes contagious.
2. Ask Your Lender For A Reduced Rate
A 5-10 minute call to your credit card company has the potential to save you tons of money.
The first step to do before calling the customer service line is to be prepared to do a bit of homework. Shop around and see if you can find better deals with competing credit card companies.
The next thing is to practice persistence. You may not have success with the first person you speak to so be prepared to call a couple of times if necessary. When talking with the customer service representative try this script for starters:
“Hello, my name is _____. I’ve been a customer of yours since ___, and I’m interested in securing a lower interest rate. I’ve made an effort to make on-time payments, and I spend ___ dollars per [month/year] with this card. I’ve recently been offered a new credit card with [competing credit card company]. It has a similar structure to yours, but they offer ___% interest rates. I’d like to stay with you based on our history, but the new offer is enticing. Would you be willing to match their offer?”
3. Pay More Than The Minimum Balance
You must make it your top priority to pay more than the minimum balance due. Did you know that paying only the minimum can affect your credit score? Not only that, you will have a heck of a time getting ahead of your debt. By putting just $10 extra to your credit card balance each month you will pay it off much sooner and save tons of money.
The 4 most important reasons to pay more than the minimum balance include:
- Save money on interest
- Pay off the balance sooner
- Improve your credit score
- Start living a simple debt free living!
4. Balance Transfer Card
If you feel that paying the minimum is nearly impossible, it may be time to search for some balance transfer credit cards. Several years ago I transferred a large sum of money to a 0% credit card and was able to pay it off within a year. It was exhilarating to eliminate a large debt from our portfolio by simply taking advantage of the 0% APR for a pre-determined number of months.
How To Become Debt Free On Low Income
You may be thinking to yourself this all makes sense if you have money to actually pay down the debt you have.
But if you are finding yourself in a predicament where you really don’t have the necessary funds to pay extra on your card each month we have a bit of work to do. But, do you know what? That’s ok! You will feel like you are walking on cloud 9 once we have knocked out some of these obstacles and you are living a debt free lifestyle.
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5. Create A Budget
We need to begin by cutting out as many costs as possible. This is the perfect opportunity to create a budget if you haven’t done so already. Creating a budget allows you to monitor your finances and know exactly where your money is going each month.
Knowing how much money you owe is important but knowing how much money you have is really important too.
By creating a budget it will allow you to see if you have extra income to start paying down your debt. It gives you a starting point that you can build from later. It allows you to determine if getting a side job or turning a hobby into some extra cash is worth it.
6. Cutting Expenses
Next, we need to do an inventory of where we can decrease or eliminate services. Sit down and look at the subscriptions, what service or membership can you do without?
Take the money you would be paying for that service and apply it as an additional payment towards your credit card. Believe me, just a little bit here and there will go a long way when trying to eliminate debt.
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7. Cut The Credit Cards
Since we are on the elimination track and having difficulty gaining traction with debt reduction it may be time to cut up those credit cards. I know, I get it, this suggestion may seem crazy to some of you, but it’s really for your own benefit.
Nothing makes a credit problem worse than adding more debt to an already large debt pile. It comes back to the mentality of just “paying for it later.” If you don’t have the cash to pay for it now, don’t buy it.
For some, it’s best to eliminate the temptation of having credit cards altogether while they get a grasp on their spending. There are extreme ways of putting a “freeze” on your credit card such as putting it in a cup of water in the freezer, making it harder to access. Some people choose to cut them up altogether.
Whatever you choose to do with your credit cards, make sure you make them inaccessible to yourself. I’ve had a friend who actually gave me her card to hold hostage while she worked to pay off her debt.
8. Side Hustling To Pay Off Your Credit Card Debt
If you have done all the necessary steps and still feel like you are stuck with getting out of debt there are alternative ways to bring in a bit of extra cash. Nowadays there are side hustles for just about everyone. You can make money by walking dogs, housesitting or even freelancing.
For more ideas on how you can make $100’s each week check out this article. Our secret sauce for making good side income has been through affiliate marketing. Want to learn how to make over $100,0000 a month in affiliate marketing? Check out Michelle Shroeder’s course she is an absolute pro when it comes to affiliate income.
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9. Other Creative Ways To Pay Off Debt
Did you know that people can also get paid to do surveys while waiting in line at the grocery store? It may seem too good to be true, but you can actually get paid to take online surveys.
Every day, big companies are looking for real people to respond to questions to help with their market research. Now let’s be honest: You’re not going to get rich answering questions but every little bit adds up. Sign up now to begin earning money through Harris Poll or Vindale Research.
If you do the things listed above you should begin to notice less and
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I am interested what are you struggling with these days? What debts are holding you back from achieving a life free of financial worry? Have you achieved financial freedom? What is it like to be debt free? Leave us a comment below we’d love to hear from you.