5 Strategies for Becoming Dept Free in 2014
Getting out of debt is a great resolution for the new year, but without a solid plan of how to do it, odds are low that you’ll get any further on your debt than last year. In fact, it is very likely that if you do not plan well you will simply sink yourself further into debt, making it even more difficult to escape. Luckily, with the proper planning and strategies, it is possible to become debt free in 2014, even if you have a large debt weighing you down. When making your plan, try these five ways to get out of debt.
1. Get your spending under control
If you’re spending more than you make, you’ll just add to the debt. Track your spending for a few weeks, and figure out ways to cut back. Start by looking at ways to cut discretionary spending. You might think that you simply cannot cut your spending, but it you plan carefully and take the time to establish a budget you more than likely will find a large amount of money that you waste every month on superfluous purchases. Cutting these purchases will not only help you to avoid more debt, but it will give you the money that you need to begin making payments on your existing debt.
2. Cut back on your utility usage
If you’ve cut everything you can on the “wants” side of the list, look at ways to make your monthly bills cheaper. Reduce your electric bill by hanging clothes to dry, not running your air conditioner, and using electricity during non-peak times of day. Water usage can be cut with creative landscaping. Also think about cutting your cable and internet package by reducing download speed and switching to movie rentals. Even if you do it for just a few months, you’ll be able to qualify for new subscriber discounts when you reinstate service. You might think that these cuts simply aren’t worth the savings, but every dollar counts when you are trying to quickly get rid of your debt.
3. Clean out your house
Odds are you’ll find a lot of stuff you can use if you simply clean out your house, saving you a trip to the store. At the very least, organizing what you have will let you see what you need and plan your shopping trips better. Of course, you’ll also find a bunch of things you don’t need anymore. Hold a yard sale, and use the proceeds to get out of debt.
4. Try bartering
Swapping your services for something that you need is a good way to save the cash you have for paying off debt. If you owe a personal loan to someone, it may even be possible to exchange your work for a full or partial payment on the principal. There are even entire internet sites where people exchange everything from vegetables grown in backyard gardens to babysitting services. Think of it as a way to earn extra money without having to get a second job.
5. Build up your savings
While it might be tempting to put every extra penny towards paying off those local Oklahoma loans, put a small amount aside into savings. While this might not seem wise, since you will be losing money to the interest that you are not bringing down, creating a savings is one of the most important parts of paying off your debt. The most important part of debt management is creating and stick to a payment plan, which can be difficult to do if you are beset by a surprise expense. Even a small savings will give you a nice buffer that you can use to protect yourself from reneging on your payments.
Follow these tips, and you’ll be able to pay off your debt in 2014.
Category: Debt, Family Finances
