Debts are the worst. Money you spend on interest and paying back principal is money you can’t invest or spend on yourself.
If you find yourself in a similar situation, it’s critical to take steps to pay down your debts as quickly as you can.
Below are six tips that can help you pay off your debts and be debt-free for life.
Take stock of your situation
The first thing you should do is to find out how much debt you actually have.
Add up all your debts – credit cards, personal loan, auto loan, mortgage, loans from family members, and anything else – and calculate your total debt.
Once you know how much owe and to whom, you can start taking steps to pay it off.
Choose the right debt repayment method
When it comes to paying down debt, you have two options. You can opt for the avalanche method (paying off high interest debts first and moving down the ladder) or the snowball method (starting with the smallest debt and climbing up the ladder).
Depending on the amount of debt you have, your monthly income, and your monthly expenses, you can choose a method which you think might work best for you.
Consider consolidating your debts
If you have several different types of debts with varying interest rates, it might be a good idea to consolidate them all into a single loan, which can make it easier for you to pay it off.
The interest rate on a debt consolidation loan is likely to be much lower than that of unsecured debts like credit cards. That will save a lot of money on interest.
Get a second job
Even if you cannot get a full-time job, getting a part-time job is a wise idea, as the extra income can help you pay down your debts fast.
If you are reluctant to take on another schedule, you can become a freelancer instead. Depending on your skill set and experience, you can become a freelance writer, programmer, web designer, transcriber, virtual assistant, tutor, consultant, or translator.
There are virtually an endless range of options available on the internet to monetize your skills.
Rent out your stuff
Renting out your stuff is a great way to make money without putting in any physical effort. From your car to storage space, parking lot, camera, clothes, tools and equipment, and baby gear – you can rent out virtually everything you have, make some money on the side, and use it to pay down your debts.