Learn the correct steps to help get yourself out of debt and develop a healthy financial mindset.
Many individuals want to know how they can reduce their debt quickly, as it can happen to any of us. Unfortunately, accruing the debt is usually the quickest part and it’s not reversible with the flip of a switch. Paying it all back (plus interest) takes a bit longer. With that said, there are ways to speed up the pace of debt payback and being able to see the amount you owe go down quicker each month is a great motivator!
Here are 5 quick tips on reducing debt to kick start your journey to becoming debt-free:
Tip #1: Cut out unnecessary expenses
Most people assume they don’t have unnecessary expenses. And it’s possible you may not have any. Still, this step is really all about taking an honest look at where you invest your money. In fact, this step alone should alter the way you shop and spend and develop a healthier mindset. For example, you might find that you’re spending a lot of money eating out and still spending hundreds at the grocery store. Or, maybe you’re spending way too much on monthly streaming services, but no one in your house is using them. An easy way to see where all of your money is going is by tracking it through Online Banking and reviewing your statements to follow that dollar! Learn how to enroll in eStatements for quick and easy access to your account history.
Tip #2: Create a budget
This is arguably one of the most important tips to becoming debt-free. Just remember that following a budget doesn’t have to mean pasta for dinner every night. You can cater your budget to what you’re comfortable with. It all starts with taking that first baby step and setting sustainable monthly limits on expenses like groceries, toiletries, clothing, and going out. If you’re spending more money than you’re making, it’s time to reevaluate your budget. Don’t know where to start? Check out our article on How to Create a Budget or learn about our free Savings Goal Tool.
Tip #3: Get creative with your hobbies and activities
Hobbies and activities you enjoy doing are really important to have, but while you’re paying off debt, consider exploring some more inexpensive hobbies or find creative ways re-invent your current ones. Love going to the casino? Start a card night with friends and play for quarters. Enjoy going to the movies? Rent a movie instead, dim the lights, and make popcorn at home. Try opting for some new interests that could contribute to helping reach your goals like coupon-cutting, teaching your kids how to cook at home, or if you have the time maybe picking up a part-time job.
Tip #4: Try a balance transfer on your Credit Cards
Balance transfers move debt from a high interest credit card and transfer it to a lower interest rate card. This means you’ll pay less on top of the amount of debt owed. At Alltru we can help find the right credit card for you. In fact, you can receive an introductory rate as low as 4.99% APR on all balance transfers. Alltru Visa Credit Cards have $0 annual fees, no balance transfer fees, 24/7-member service, and zero liability fraud protection. It’s a win-win and a proven way to save you money while paying off your debt. Check out our various credit card options here.
Tip #5: Start selling – One man’s trash is another man’s treasure.
If you’re not actively using something like a large appliance, piece of workout equipment, clothing item, or a piece of technology, try selling it. A good rule-of-thumb to follow is the “Don’t use it, Lose it” principle. If you haven’t used it in over a year, then you probably don’t need it. Online sites like Facebook Marketplace, Poshmark, and Craigslist can help you sell things in your local area or even to others across the country for little to no extra cost.
Paying off debt may require you to make a few adjustments and small lifestyle changes, but it doesn’t have to be daunting. If you have a difficult time adjusting to new circumstances, implement tiny, gradual changes so the process won’t become too overwhelming. This is a work-at-your-own-pace process so remember to take it one step at a time.