3 Tips For Getting Out Of Debt

19 July 2016
 Categories: , Blog

Meeting with a financial advisor is a great way to take control over you financial future. Many people want to be financially independent but don't know what steps to take to insure that they get the most out of their money. When you meet with a financial advisor they will explain to you that one of the most important steps to becoming financially independent is getting out of debt. Here are some tips to use that can help you to get out of debt.

1. Set A Certain Amount For Debt Repayment

First you should allocate a certain amount of resources to your debt repayment. Then you should start by paying the minimum on all of the payments, except for the smallest. On the smallest loan you should put all of the excess money that has been allocated to debt repayment. For instance, if you have an extra $200 to go toward debts then you should put that toward the smallest debt,. Once the smallest debt is paid off, then you move onto the next smallest and put all of the excess money towards that. As you pay off debts you will have more money to put towards each payment. So by the time you get to your last and largest debts, you are making large payments each month.

2. Don't Acquire Any New Debt

This may seem like an obvious tip, but many people have a hard time staying within their budget. If you are serious about getting out of debt, then you need to learn to live within your means. For some people this means that they use a cash method. Instead of using a debit card to pay for all of their expenses, they have envelopes of cash that are assigned to certain things: groceries, entertainment, and so forth. Then once the cash is gone, it is gone. You no longer have money for those things so you have to do without. This will help you to see just how much money you are spending each month on certain items and will help you to stay in budget.

3. Take On Odd Jobs

Earning a little extra money here and there will be the best thing for your debt repayment. If you have the chance to earn some extra money taking surveys, do it! Even putting down an extra $20 on a debt will make a difference in the long run and will shave time off how long it takes you to pay off debt.

By following these simple rules you can pay off your debt faster and be on your way to financial freedom.