If there’s one thing that is common to almost all of the people who existed in this world, that would be having debt. Often, we feel like everyone is indebted. We could only count a few percentage of people who are not. Debt has become a significant part of our life that without it, we felt like we cannot function well in our life, especially in the area of managing our budget and finances.
“When you get in debt you become a slave.”
-Andrew Jackson
But as we all know, having debt is both a blessing and a curse. It is a blessing in the sense that if you are a good payer, you’ll be able to get some money immediately. Oftentimes, banking institutions or loan companies will let you borrow money instantly. You don’t have to struggle seeking someone to lend you a hefty amount of money.
However, for people with bad records or those who are new to loan systems, It can be a burden to find a company that’s willing to entrust them with their money.
Moreover, we carry the burden of paying debts. Being indebted can be stressful to our household and financial management. We need to sacrifice some things. For example, before purchasing the things we need, we have to offset the debt first.
How do we make ourselves free of debt? Here are four practical ways to pay off your debt sooner than later to become debt-free.
Paying More than the Minimum Payment
Whether you have some loans in credit cards, student loans, or personal loans, you already know the terms of payment as well as the amount you need to pay every amortization date. This is a good move by the company since it gives you an idea of how much you will be paying and for how long.
However, you shouldn’t get too dependent on it. If you have some extra cash with you and you don’t know what to do with it, we recommend that you use it to clear your loan. Paying more than your minimum payment will save you from a lot of headaches in the future. This is particularly true if an emergency arises and you’re unable to pay your debt. It’s the fastest way of getting rid of your debt.
“Interest on debts grow without rain.”
-Yiddish Proverb
Try the Debt Snowball Method
When you have back-to-back debts, and you don’t know which one to clear first, then you should try this method. The art of this approach is that it will let you list all your debts (from largest to smallest). Then the trick is paying the smallest debt first. Why the smallest, you ask? It’s because we take small debts for granted, seeing as they’re just . . . small.
However, don’t fall for this scheme. What happens is that most small debts became bigger over time because we don’t pay them duly. Just think it carefully, if you’re able to pay a small debt in one go, what’s holding you back from doing it? If you clear it as soon as you can, you’re already out of one debt! Then, you can move to the next loan, and so on. Eventually, you’ll be out of debt. This is very effective when you’re managing multiple debts.
Look for an Extra Job, either Part-time or Sideline.
Let’s just say that your current job right now is enough to pay your bills, debts, and leisures in life. You’re already using the snowball method to handle your debts. However, if you have an extra income source, things would be easier. Get yourself an extra job. You can take a part-time writing job, babysitting, tutoring, etc. Utilize your talent for few hours in exchange for some cash. Freelancing can give you the extra money you need to pay your debts. And in no time, you’ll find yourself debt-free!
Sell Excess Commodities
If you don’t have enough time to take an extra job, try to look into your closet, your living room, or your house and take note of the excess commodities you have. Do you really need to wear those extra 50 clothes Or your additional 10 pairs of shoes? Or your coloring books? We think you don’t really need them. Therefore, instead of piling them up inside your house, sell them. In this way, you’re not only earning money but you’re also helping people and declutter your house!
