If you’re struggling with debt, it can be challenging to see the way clear. If your earnings are not sufficient to cover your debts, something has to give. Unfortunately, there is no guaranteed way to dig yourself out of debt. The best approach usually involves making several positive changes in different areas, depending on what you can manage. Here are some useful methods to help you sort out your debt.
Pay Down Pricey Debts First
One of the most pragmatic approaches to managing debt is to pay as little as you have to on monthly payments for all your debts and credit cards except for the one that’s costing you the most in terms of interest. Which one stings the most? Pay that one as soon as you can by devoting all your energy and extra cash to it. After a while you may be surprised to note that your worst debt is paid. Now redirect all the money that you had been paying into that first debt and begin to pay off your second-largest debt. Go methodically down your list in this way, paying your debts in order. One of the best things about approaching your debts in this way is that you should start to see progress fairly quickly as you pay down one debt at a time.
Start a Side Hustle
If you have a hidden talent, you could be sitting on an amazing opportunity to earn yourself a little extra money which can be used to pay off your debts that much faster. Side-hustle ideas abound online, but a successful side-hustle will come down to doing what you’re good at, and what you love. Monetizing a passion or hobby may not be what you had in mind when you started doing it, but many people who take the plunge discover that the urgent financial crisis gave them the push they needed to start devoting more energy and time to something they really enjoyed, and ultimately were grateful that they did. For example, if you’ve been doing your friends tattoos for years, now might be the time to invest in a tattoo stencil printer and take your passion to the next level. Or if you’ve been keeping a diary since you were a kid, why not make that hobby public and start earning some extra cash as a blogger? One day you might be glad that you had a reason to start taking your hobby more seriously.
Get a Used Car
If you’re struggling with mounting personal debt and you need to buy a car, a second-hand vehicle should be a no-brainer. You’ll get way better value for money than a new vehicle, end of story. It will also depreciate much slower, meaning you’re getting better value in the long term. If you have recently purchased a new car, and have since discovered that you’re heavily in debt, it’s worth selling your car as soon as possible, before it depreciates too much. Use that money to buy a used car, which will be more cost-effective. While it’s never pleasant to have to let go of something you’ve only just purchased, you’ll be glad you did once you’ve managed to pay down a portion of your debt and start sleeping a little easier.
When debt starts piling up, it can feel as if the sky is falling in. These suggestions will help you take stock of your finances and take some positive steps towards getting your life back in order.