Whether you are trying to be debt-free because it puts your mind at ease or you have years ahead of you to pay off that student loan you’ve taken to complete your education, the fact of the matter is that most of the people living both in the United States and all over the world have borrowed money at some point or the other, and they’ve had to make various sacrifices to pay their debt.
If you’d like to complete this process a little faster, maybe you should check out the tips we’ve listed below.
There are several ways of getting debt-free faster, but you have to be as organized as possible. One simple method that you can consider would be to redirect money as you get your paycheck. Automated payments will be performed without you having to do a single thing, and the amount of money that will remain in your account will be the true one, that which you have the freedom to spend.
It’s often that people get ahead of themselves when they get their paychecks, and they forget all about taxes or the loans they have to pay off. Automated payments make this impossible, so you’ll at least be aware of your financials and you’ll start spending money in a more mature and responsible way.
Always start with a plan
Let’s say you have three loans you have to pay. There are two major ways of handling the payments. You can either start with the one that has the highest interest rate, because it makes more sense to pay off this loan faster than the other two. You can also choose to split the money between all of the three, but it would still be a good idea to redirect more to the one with the highest interest rate.
The other way of paying off your three loans quickly would be to make payments to the smallest loan first, so at least you have the feeling that you’re doing what you’re supposed to and that you’re on the right path.
Of course, each person’s situation is different, so we would advise you to analyze your own and decide on the method that best suits your needs. Perhaps you’re more motivated by getting rid of one loan faster than by paying off the one with the highest interest rate first, no matter the amount.
Make a budget
What’s the tightest budget that you can handle? This is one important question that you must find the answer to as soon as possible. If you have a steady job and you aren’t worried that you might lose it anytime soon, your situation is more or less stable, so you can start making payments as fast as possible.
It’s easier to make sacrifices right now than trying to cut back on your expenses after you have become accustomed to getting coffee at Starbucks every morning instead of brewing it at home. Make a list of the purchases that you make every month without even realizing. For some, this might be buying a bottle of water while they’re out and about instead of bringing a reusable one filled with tap water from home.
Believe it or not, there’s nothing wrong with tap water as in most places, it’s perfectly safe to drink.
You should try to write down all of the expenses you make. Of course, there are eco-friendly ways of tackling this, and you can use a budgeting app such as Mint if you’re more prone to utilizing your smartphone instead of putting pen to paper. But remember, sometimes seeing the numbers written down in your own handwriting can be a dawning realization.
If you have a well-paid job and you work in an expensive city like New York, the temptation of renting a place all for yourself can be very difficult to manage. Let’s be a little realistic. Unless you are fortunate enough to be a digital nomad or you have one of those jobs where you can work at home, it makes little to no sense to have an entire apartment all to yourself.
Every room or square inch that you do not use in your place costs you extra, simply because you have no specific purpose for it. Try getting a roommate. Living with your parents can be another solution to this problem because you’ll either have to pay them very little rent or just part of the expenses of keeping a household.
Not all loans are bad
Taking out loans can actually be good for your credit, so if you’re under the impression that your credit score can be improved only if you have never borrowed money in your life, that mindset is, unfortunately, incorrect.
Your credit score gets better and better as you stick to your payments and complete them regularly. So, whether you like the idea or not, at some point you might have to consider getting a payday loans America alternative or something in these lines. After all, such a loan usually is smaller compared to many others. And since in many cases, you can’t borrow more than eight hundred dollars, the interest that you’ll have to pay will also be smaller.
If you have a full-time job, it’s like that you aren’t exactly excited at the opportunity of working extra for a bit of cash that can assist you in paying out your debt faster. However, not all side hustles are the same, and many will give you plenty of opportunities in the long run, and more than enough freedom.
If you really don’t want to work extra, all that you have to do is make an analysis of the things you own and make a list of those that you actually don’t use often. How many of us have bought a waffle maker and used it just three times, even though we’ve owned it for three years? Discover all of the devices, gadgets, and appliances that are holding you back from having a clutter-free lifestyle. Organize a yard sale or use the power of the Internet to sell them.
As for side gigs, even if you’re not a U.S. native, you can make a bit of extra cash if you’re good at various online things. Maybe you’re an astute data analyst, or maybe you can write content, whether in your native language or in English. There are hundreds of thousands of websites looking to hire content writers every day. Use a safe platform such as Upwork to get a side gig.
Ask for help
This advice works for most individuals who aren’t or haven’t ever been in need of a huge amount of cash for a particular purpose. Of course, you can’t ask your friends or family to fund your education in full, but you could get some of the money from them, or they might be able to help you out with paying your debt.
Best of all, almost none of these people that you’ve known your whole life will ask you for interest. You do have to make sure you set some ground rules and pay them back so that you avoid conflict.
Refinancing your loans
Especially when it comes to a student loan, you might have to look into the refinancing options you have available. However, one important note must be made in this respect, and it’s that this process is available through private companies, which is why you might lose the protections ensured by federal loans if you decide do go through with it.