Debts might have been a part of your life for too long. Sometimes you lack the discipline to pay them off, and they remain a threat to your mental health. You do not know how to start paying them off, especially when you barely have enough to pay your bills. In this article, we will see about the creative ways to pay off debts faster.
While debt is increasingly becoming a part of our lives, it is possible to be debt-free. As you read further, we’ll show you creative ways to pay off debts faster such as: using the snowball method, Leverage app, etc. But before that, you must understand why you must prioritize paying off your debts.
Why You Should Be Debt-free
Understanding why you should be debt-free is the first step towards disciplining yourself to pay them off. Although almost everyone has debts, you don’t want to be among those with heavy debts. Here’s why:
- Your life is healthy: You don’t have to worry about paying off debts. This can save you from depression. Therefore, you enjoy sound mental health.
- Your financial strength increases: You have enough money to pay your bills. So, instead of settling debts with your extra funds, you can invest.
Although being debt-free is one of the most relaxing situations you could ever be in, it is almost impossible to stay without debt, no matter how little. Therefore, your next concern should be how to get out of them.
Get Out of Debts
The only way to get out of debt is to repay whatever you owe until you don’t owe anymore. However, in reality, it isn’t that easy. Freeing up funds to pay off your debts requires sacrifice, especially when they’re barely enough to foot your bills. We have outlined four things you must do before you start paying off your debts:
- First, make a list of all you owe.
- Then, sum up the list and know your total debts.
- Next, determine how much money isn’t included in your budget monthly – the excess money after paying your bills.
- Also, determine how much money you can free up by canceling something from your budget.
Pay Your Debts Off Creatively
The high debt rate has increased the desire to be free of it. Therefore, there are many creative ways to pay off your debts. From the outline below, consider any of the following methods you think can work for you.
Use the snowball method
The snowball method is one of the most effective ways to settle your debts. Draft a list of debts, and pay the smallest off with your excess funds. After paying off that account, add your funds to the minimum payment towards the account. Then, start working on the next account. This way, you will have monthly funds to settle your debts.
Sell your extra stuff
You probably have some stuff lying around that you don’t need. Sometimes these extra things take up extra space in your apartment. Selling these stuff can add weight to your funds. So, use the extra to pay off your debts.
Do something extra
Most times, depending on one stream of income is not ideal. If you have many debts, get more funds. A side hustle is an effective way to add up to your funds without relying heavily on your main income. Here are some side hustles you should consider.
- Freelancing: Perhaps you can create websites, designs, read or write content. Use this skill in freelancing to get extra funds. Platforms like Fiverr and Upwork are some of the best in the freelancing industry.
- Delivery service: Try working with restaurants and other local businesses to be a delivery person. This could be a lot easier if you own a bike. Doing this n your spare time can get you extra money.
Leverage apps
Make use of online apps that help you keep track and organize your debts. Some of these apps include; Qoins, Mint, YNAB, and Truebill.
Pay yourself
Stop paying for services you can do yourself. For example, wash your car yourself instead of paying for a carwash service. You can maintain your lawn yourself instead of paying for it. If you don’t have a lawnmower, you can borrow it from your neighbors. Paying yourself instead of professional service providers is a good way to save more funds to pay debts.
Request for lower interest rate
Asking your creditors, especially if you have to pay a huge debt, is another option to explore. You can contact your creditors to see the possibility of lowering your interest rate.
Conclusion
Adopting one or more of the above-stated methods can be a breakthrough in breaking free from debts. Though easier said than done, paying off debts can be done creatively.
Frequently asked questions
- Does the snowball method mean settling off the smaller debts first? Yes, it emphasizes paying off debts from the smallest to the biggest.
- Is the snowball method different from the avalanche method? Yes, it is. The avalanche method prioritizes bigger debts over smaller ones.
