7 Ways to Get Out of Debt in 2024
It is easier to get into debt than to get out of it. Most times, you incur a loan in a matter of minutes, while it could take months or years to pay it off. With the increase in online loaning apps, falling into the trap of taking loans is now very easy and at the comfort of your home without even visiting any office or filling out any form.
When you incur debts, it feels like you are stealing from your future, especially when they are incurred on consumable expenses. Getting out of debt is one of the best feelings on earth; in fact, that breath of relief is worth more than gold.
The stress of taking calls from your creditors and explaining why you haven't paid your debts is not healthy. Like waking up to emails and reminders about loan repayments. I have seen people who died while thinking about the huge debts they incurred; some even committed suicide. Some people have to run away from home so that their creditors won't find them. I am sure this is not the type of life you want to live in the year 2021.
When you incur debts, it feels like you are stealing from your future, especially when they are incurred on consumable expenses. Getting out of debt is one of the best feelings on earth; in fact, that breath of relief is worth more than gold.
The stress of taking calls from your creditors and explaining why you haven't paid your debts is not healthy. Like waking up to emails and reminders about loan repayments. I have seen people who died while thinking about the huge debts they incurred; some even committed suicide. Some people have to run away from home so that their creditors won't find them. I am sure this is not the type of life you want to live in the year 2021.
What are the easiest ways to get out of Debt?
There are many ways to get out of debt quickly without stress. This article has some tips to help you pay off your debt faster:
1. Stop incurring more debts
So, what is the first step to getting out of debt? The first step to getting out of debt is to stop accumulating more debts; otherwise, it will be harder to come out. Like the popular proverb "when you are at the bottom, stop digging". Avoid taking loans from your family, friends, banks, and other financial institutions. This step will not cut your loans but will help in the process of getting out of debt so you don't accumulate more.Furthermore, avoid taking out loans to pay off another loan. If you do, you aren't paying off the loan; you are just running around the circle. For instance, Mr. A took a loan of $200 from XYZ Limited to repay in five months; he couldn't pay off the debt when it was due, so he took another loan from Mr. B to pay off the loan. He may think he has paid the debt, but he is still swimming in it because he still owes Mr. B. The truth remains that getting out of debt means becoming totally free from it.
2. Organize your debts
You can do this by calculating how many loans you have, then arranging them according to priority so you will know which ones to pay off first. You will need to list the amount you owe, the interest payable, and the monthly minimum payment on each loan. A debt-repayment plan is easier to develop when you have all this information available.3. Increase your monthly payments
If you can pay more than the monthly minimum on your debts, then you will get out of it faster. Let's say you have a debt where you are to pay $100 monthly for the next six months to complete the repayment. You can increase the monthly payment to $150 to help pay the debts faster. Now you will have four months to pay off instead of six months. Interests can exponentially increase the timeline you have for paying off your loans. To get out of debt faster, try to increase your monthly payments.4. Build an emergency fund
Having an emergency fund is necessary when trying to get out of debt; it stops you from incurring more debt when life happens. It is advisable to have an emergency fund that can take care of your needs for at least six months for unforseen incidents. Unexpected or unplanned expenses might be the reason you are in debt; an emergency fund will take care of such expenses till you get back to your feet, so you do not borrow.5. Have multiple sources of income
Building multiple streams of income is important if you want to get out of debt and avoid living paycheck-to-paycheck. Some people have only one stream of income, which is usually their salary. An extra source of income will help you settle your debts faster. An extra source of income could involve starting a side hustle, getting a part-time job, or selling products online. Then you use the extra money you earn to pay off your debts.6. Change debt-enabling habits
To effectively manage your finances, you will need to cut down on your expenses to the least. The fact is, many people spend more than their monthly earnings. Once you keep an eye on your spending habits, you will be able to cut off the excesses to enable you to live economically.You can do this by replacing paying for DSTV with GOTV, cooking at home and not eating out, and cutting the amount you spend on data. Just try to live below your means for as long as possible until you pay off your debts.
7. Live within a budget
A budget is like telling your money where to go instead of wondering where it went. One of the main reasons most people run into debt is because they do not know how to control their expenses. To become debt-free, you need to take charge of your personal finances, and budgeting is the best way to do this. Create a budget, then stick to it, and cut off the excesses in your expenses. Don't buy things you didn't budget for, no matter the discount.CONCLUSION
Getting out of debt is a difficult task, but by being disciplined and practicing the tips stated above, you will do it in no time! Remember, when you finish paying your debts, avoid those habits that made you incur them.
