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Debt is no easy subject to tackle. In most households, debt is a crippling factor that can ruin credit scores, loan applications, and personal financial life. This is why most people refuse to even pay off their debt, knowing in the back of their minds that they’ll never be free of it. However, it’s important to take a stance today and start clearing off your debt pile. With the end of the year only a few months out, here are a few ways you can start sweeping out old debt before you take the plunge into 2018.
Tip #1: Choose a side hustle.
To clear off your debts, you’re going to need money to do it. If your paychecks are going directly to your bills and savings, it can be hard to pay off debt at the same time. However, by picking up a small side hustle, you can work towards paying off your existing debt.
Fortunately, there are easy to use resources, such as UpWork and TaskRabbit, to help you make money on the side, even if it isn’t necessarily a lot. Just remember, the more you earn on the side, the more debt you can start paying off.
Tip #2: Pay more than your minimum payment.
If you currently carry a credit card balance, which many of us do, it’s important to make monthly payments to avoid further penalty. However, you should also be paying off more than your minimum payment, the golden rule being your minimum payment and an additional ten percent. This way, you can cut down your debt more quickly and look like a more reputable borrower.
Tip #3: Snowball your debt.
If you can pay off more than your minimum on your credit card statement, as well as other debts, you should consider snowballing to reduce your debt faster than ever. To do this:
- List all the debts you owe, smallest to largest.
- Place your excess funds in the smallest balance you owe, while you make regular minimum payments on your larger debts.
- Once your balance is completely paid off, use the money remaining to pay off the next smallest debt, and so forth.
You’ll soon realize that your small balances are slowly disappearing, allowing you to have more money to knock out your larger debts. This snowball method will help you tackle smaller debts, helping you improve your credit score while feeling great doing it! Slowly but surely, even your largest debt amounts will be completely paid off.
Tip #4: Sell your old junk.
When you’re trying to knock out debt and a side hustle just isn’t doing it, a garage sale can help. As long as you have old junk that you can bear without, you can make a good chunk of money to pay off any small debt balances. Just make sure that you live in a neighborhood that allows garage sales on your property. However, if you aren’t, you can always take advantage of online marketplaces, such as eBay and Craigslist.
Tip #5: Create a strict budget.
If you’re serious about paying off old debt, it’s time to create a stricter budget that will allow you to do so. This means limiting your expenses as much as possible and living with what you have as long as possible. This can be anything from cutting down on food shopping to getting rid of your Netflix account. However, keep in mind that this is only temporary until you’re out of debt.
Tip #6: Get a seasonal or part-time job.
With the holiday season coming up, such as Halloween, Thanksgiving (Black Friday), and Christmas, it’s never been a better time to land yourself a seasonal or part-time job. Retailers are always on the lookout for seasonal workers who can bear through long work shifts in a busy store. Although it will most likely only pay minimum wage, even a little bit of extra money is better than nothing, especially when it comes down to paying off old debt that’s weighing you down.
However, even after the holidays, stores are always looking for part-time workers. Consider this as a small money-making opportunity that can clear out some credit card debt, or even as something to get you out of the office.