Simple Ways To Get Out Of Debt

Simply put: Nobody likes being in debt. Whether you’re paying off a small loan, owe money towards a bill, or paying off your mortgage, debts are a headache.

In fact, debts are a leading cause of stress. Larger debts also contribute to higher levels of stress. Considering stress can put you at risk for a number or different illnesses and diseases, debt can be a serious issue.

But, despite its widespread lack of popularity, debt is quite common. In fact, it’s estimated that around 80% of people are in debt in America alone. This number is even higher for those who’ve experienced debt at least once in their lives.

Debt can also cause more than just health issues. A history of debt, or current debt, can get in the way of you getting a loan or opening some accounts.

So, I put together this article detailing a few simple ways that you can manage, reduce and even eliminate your debt.

Start a side-job

When it comes to getting debt under control, and trying rid of it, there are only two ways to do it:

Increase your income

Decrease your spending

This method obviously involves the former. But, many feel that getting a side-job would mean a lot more work and could lead to exhaustion. This is rarely the case though. Many freelance side jobs can be done on a “once off” basis. So, they can be a quick and easy way of getting some more cash.

Organise your bills and outgoings

As mentioned above, the other way to eliminate debt is to reduce your spending. This gives you more money to pay off your debts. But first, you need to understand and organize your expenses.

This is because many expenses can fly under the radar of most people. Simple things like how much you spend on coffee or lunch can build up to be a huge expense over time. So, the first step you need to take is to organize your bills and debts.

These can be segmented into:

Obligatory expenses (like loans or other debts or bills that need to be paid)
Optional expenses (like your coffee or a night out on the town)

You can then divide these into time-dependent bills or expenses, and non time-dependant expenses. This means you know both what you have to pay, and when you have to pay it. This allows you to prioritize certain bills and amounts over others.

One good way to do this is to calculate your average daily cost of living by adding all your bills in a month and averaging it top each day. Then, laying out your weekly, monthly, and yearly debts will help you plan your payments.

Reduce (or eliminate) unnecessary expenses

After sorting out what your expenses are and when you need to pay them, the next question is if you need to pay them at all. Examples of expenses that are often unnecessary include gym memberships, subscriptions, or buying coffee. Restaurants and visits to the bar can also be a huge expense if done regularly.

So, looking at which optional expenses you want to keep, and which you’re better off reducing. This might not be pleasant at first. But, it will allow you to have a more efficient cash flow that you can use to get rid of some debts.

Switch to paying per use

This is a bog money saver for many of people who are struggling with debt. A lot of people pay subscriptions or fixed rates for things like their phone bills and electricity. While this may seem like a good idea, it can be very inefficient. This is because a lot of people may not use their phone or other services enough to justify what they’re paying.

By switching to a pay-per-use service on bills like your phone, electricity or heating, you can reduce your bills and only pay for as much of a service as you need. You can also stop paying them if you don’t have the money, without going into debt.

Shopping around to find good deals is key her to find a good rate that suits you and is sustainable.
Prioritise debtors (if you’ve multiple debts)
If you’ve more than one debt, you may have to plan for when each needs to be paid, as well as if you can extend, or not pay some of them (temporarily). For example, credit card bills have a short repayment period of around a month. They can also charge you a lot if you miss a payment.

In contrast, many loans can have their repayment period extended. Some banks may even help you make repayments during difficult times by temporarily reducing payment amounts.

Certain bills also have relief funds and services available for those who can’t pay them. So, knowing which bills or debts need to be paid immediately and in full, versus which can be postponed or extended, can help. You can also learn how to repair your credit so you can take out more loans in the future. This knowledge, along with the above steps, can help you develop a game plan to help you tackle your debt and get back into a surplus.