Small Steps – 5 Starting Strategies to Rescue Yourself From Debt
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Debt is a crippling force that looms over most Americans. It can be difficult to make payments, let alone think of the light at the end of the tunnel. But don’t lose hope yet. Here are five starting strategies to rescue yourself from debt:
Stop taking on loans now
Some loans are unavoidable. Examples of unavoidable loans for some are mortgages and student loans. If you do find yourself in a position where you need instant money, be sure you research the small money loans you take on and make a plan to pay them off quickly. The best practice is to stop excess spending and avoid taking on new debt altogether.
Try a no-spend month
Debt comes from the need to spend money, right? Well, what if you could stop spending money? I know this sounds daunting and impossible, but you can eliminate excess spending by identifying your basic costs such as food, mortgage or rent, and utilities. Anything after that, try going without for a month.
This fast not only puts more money towards your debt, but you are able to evaluate what you really can do without and keep going long term as a way to increase your attack power on your debt. For more prep on how to forgo spending for a month, read on here.
Budget
We have all heard of budgeting. It is a simple concept, but so many Americans don’t use one to their advantage to get ahead with their finances. In fact, 78% of Americans live paycheck to paycheck which leaves them vulnerable to increasing amounts of debt in the event of an emergency.
By budgeting, you are able to see your income, see your expenses, and line them up better so you have the emergency fund you need to avoid unnecessary debt and increase your payments on the debt that keep you down. Never underestimate the power of putting pen to paper and actually following through with the plan.
Downsize
This strategy can be as small as decreasing the number of trips you take to the city for entertainment all the way up to getting a smaller place to save money on rent and utilities. This strategy looks different for everyone, but no matter who you are, you can find an area of your life to downsize in order to save money and get out of debt.
Maybe you can eliminate the very thing causing your debt. Are you leasing an expensive car? Return it and find a reliable used vehicle. Did your family not grow as big as you expected when you bought your current house? Maybe you can find a smaller, budget-friendlier home in an area you love. Find the way to downsize that works for you and your unique situation.
Create a side hustle
There are so many hours in a day, but what if you spent the extra hours not at work developing a side hustle that brought in extra money. The amount of freelancers in America is rising, and you don’t have to drop your full-time job to join the group. Use your skills to help others with projects they are outsourcing. Create an Etsy store for the crafter in you. With the extra income, you can eliminate your debt quicker and reach the light at the end of the tunnel on your terms.
Getting out of debt is a freeing feeling and a huge milestone in a person’s life. These five strategies can help you rescue yourself from debt sooner than you think.
