Last updated in September 2020
People tend to spend more than they earn and use credit to cover up those additional expenses. This has gone to the extent that being in debt has become quite a normal way of life for many people. As of January 2020, households in the UK were in debt to the tune of £1,680 billion.
But when an emergency or disaster occurs, it can knock you off your feet, and you might find yourself unable to pay your monthly expenses. Unfortunately, it is during these times that people realise how shaky their financial situations are.
On the bright side, many others have discovered that living a life free of debts is the best way to take control of their finances. To help you out, here are some of the ways you can pay off your debt.
This is a collaborative post.
- Test out the debt snowball method
The snowball is an effective debt-reduction method that involves paying your monthly credit charges at a much faster rate. It is a useful strategy for people with multiple credit accounts. What you will need to do is make a list of all your debts from the smallest to the largest.
The trick is to put all your excess funds into paying off your smaller debts while making minimum payments on your larger loans. With time, you will pay off your smaller debts and move those funds into paying your more massive debts. The main goal of this strategy is to put all your extra pounds into your expenses until you are finally living a debt-free life.
- Start a side business/get a part-time job
Multiplying and diversifying your income streams is also another effective way of reducing your debt. In fact, currently, there are about 1.1 million people who have multiple jobs. If you earn more money, you can put more into repayments.
So, if you have a skill that you think can be profitable to you, try to take advantage of that. Alternatively, you can opt for a part-time or seasonal job to help you earn some more money. Many businesses usually hire seasonal workers during holiday periods, so you can check some of them out to see if there’s one for you.
- Consult with Debt Relief companies
Debt relief companies work on your behalf with creditors to lessen the amount of debt you owe. What these companies also do is encourage you to pause on making any repayments and save up money for a cumulative (or lump-sum) payment.
Of course, hiring their services has a risk. Your credit score might take a hit, or your creditor might sue you for failure to pay. However, some companies like the Debt to Success System ensure that their clients meet their goals as quickly and efficiently as possible.
- Sell belongings you do not need
Take some time out to clean your home space and remove some items that you no longer need. You can sell these items to make some extra money to pay off some of your debts. If your neighbourhood permits, you can organise a garage sale to get rid of some of those unwanted items.
You can also consider other options such as consigning them away, selling them to thrift stores, or through online resellers like eBay and Facebook.
Don’t let debt become a part of your life because it may become a dangerous situation when you need more funds to attend to emergencies. Remember, there’s always a way out of your debt, and living a debt-free life could be yours if you stick to a plan.