It’s possible to erase debt this year. But you have to be committed to the task. Because let’s admit it to ourselves. It’s very hard to get out of debt. Even if you have the funds to pay it off, you can still find yourself struggling with every payment.
Why? The temptation to spend it on something else is just so great. So you have to make sure that you can curb this temptation so you can stick to your monthly debt payments. Otherwise, you won’t be able to reduce your debts. The longer it takes for you to pay it off, the more costly it will be for you.
The truth is, there are many strategies that’ll help you erase debt this year. You just have to be specific about what you want to accomplish by the end of the year so you can choose which one you want to use. What’s important is that you consider your specific financial situation before you make a choice. That way, you are sure to afford the payments. But that’s not the only reason. If you choose the right option, every payment should get you closer to your financial goals.
4 moves that will erase debt and improve your finances
So what can you do to completely erase debt and eventually improve your finances this year?
There are 4 financial moves that you can do.
Increase your monthly income
To erase debts you have to increase your monthly payments. The more you pay each month, the faster you’ll get out of debt. When that happens, you’ll save money on the interest and other fees that are usually associated with being in debt.
The best way to increase your monthly debt payments is to find a way to earn more. When you increase your monthly income, you can put more money towards your debt payments.
Increasing your income is not just about asking for a raise. You can get a side gig to help support your primary source of income.
During the pandemic, the need to get a side gig was greater than ever. Reports revealed that 64% of Americans sought a side gig after they encountered problems with their primary jobs. Some were forced to get pay or time reductions while others completely lost their jobs. Although that could mean that a lot of people are looking for side gigs right now, it shouldn’t deter you from finding one of your own. With the lockdowns caused by the pandemic, a lot of businesses realized the importance of having an online presence. That means a lot of them are looking for online workers as well. If you have a skill that they can use, like writing or programming, that can work in your favor.
If you are resourceful enough, you’ll find a lot of opportunities to earn extra money. Even if it means baking a huge batch of cookies or other products to sell online.
Another strategy that you can use to help you erase debt is to live a frugal life. Frugality is all about spending only on your priorities. The idea is to limit your spending by focusing on your priorities. If it’s not important, you won’t spend on it. That’s the simple yet difficult rule that you have to follow.
How do you do that? You can downsize your lifestyle. Scrutinize every expense you make and figure out if these are all essentials. You can go the drastic route and downsize your whole house. Or you can just cut back on some expenses.
With this lifestyle, you should be able to lower your expenses significantly. The amount that you can save can be used to help you erase debt.
But what happens after you’ve paid off your debts? It’s up to you if you want to continue with the lifestyle that you followed. You can keep doing it and just make a decision to either retire early or save up for another financial goal.
Know more about debt relief programs
To successfully erase debt this year, you should also take the tie to learn more about debt relief programs. Even if you can afford to pay your debts based on the original terms, why would you do that if there’s an option that will make it easier? Or will help you save money on the overall debt amount that you have to pay? If there’s a debt relief program that’ll help you get out of debt faster wouldn’t you want to use it?
If you want a better way to erase all your debts, get to know your debt relief options. You have debt consolidation, credit counseling, debt management, debt settlement – and even bankruptcy. These options are all effective. But you have to make sure that you choose the right option based on your financial situation. That way, you can be sure that the monthly payments will be affordable.
Be responsible with your finances
As you try to erase debt this year, there’s one thing that you need to do. You have to learn how to be more responsible with your finances. That means you have to change how you choose to spend your money. Just like how 64% of Americans said that their spending habits changed when the pandemic hit. Remember that statistic the next time you make excuses about your inability to improve your financial habits. Even if you’ve always done something the same way, that doesn’t mean you can’t improve it. You just have to find the right motivation to make the change happen.
Moves to avoid to erase debt successfully
Now that you know the financial moves that you have to do to erase debt, the next thing you have to do is to find out what you should be avoiding.
Here are three things that you have to avoid as much as possible.
Failing to realize your mistake
If you want to improve your financial position, you have to first realize that you made a mistake. If your debt has become too much for you to handle, that means you made the wrong choices somewhere. Maybe you borrowed bad debts. Or you spent too much that you had to borrow money to pay for your priority expenses. It’s also possible that you did not save up for an emergency.
Whatever the mistake is, you have to find out what you did wrong so you can avoid doing it again.
Delaying your plans to improve your finances
Another mistake is procrastination. If you can improve your financial situation right now, what are you waiting for? You have to improve as soon as possible. Why? Because the faster you can erase debt, the less you have to pay towards it as a whole. You’ll save money and that will help as you improve your finances even better.
Finally, if you want to really erase all your debts you have to stop being pessimistic. Believe that you can get out of debt. People have done it before. Even if your financial circumstances are difficult, you have to focus on getting out of debt. Because the more you focus on being positive, the more you’ll see opportunities that’ll help you pay it all off.