This “How to get of debt and stay of debt” article will explain several ways to pay off debt and live debt free.
Getting out of debt and stay out of it can be a little hard to do. But if you control the way you spend your money, you can go a long way to getting out of it. However, you need to understand that not all debt is bad.
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Two Types of Debt:
One way to get out of debt is to understand that there are two types of debt: a good and a bad debt. A good debt is a one that helps you to buy something that increases in value and generates income. For example, borrowing money to buy a house or investment property is considered a good debt, because it may increase in value and generate monthly rental income.
On the other hand, a bad debt is one that does not earn you any income and is not tax deductible. A good example would be taking a personal loan for a holiday, or use a credit card to purchase a TV. So in order to get out of debt and live debt free, avoid bad debts at all cost.
If you are dealing with bad debts, follow the steps below:
1. Get A Part-time Job or Work Overtime to Get Out of Debt
Getting a part time job is a good way to get out of debt fast. A part-time job, for example, or working overtime can bring an additional $500 a week, and can help pay down a high interest credit card or car loan.
There are some side hustles you can do to bring home extra money and get out of debt.
- Start a blog. If you’re interested in starting a blog that makes money fast, I created a step-by-step guide that will help you start a blog of your own for cheap, starting at only $3.95 per month (this low price is only through my link) for blog hosting. In addition to this low price, you will receive a free blog domain (a $15 value through my Bluehost link if you purchase at least 12 months of blog hosting.
- Take Surveys. If you want to make extra cash, I suggest that you take surveys online. I recommend, Pinecone Research (earn minimum $3 per survey), Swagbucks ($5 sign up bonus + get paid to take surveys), InboxDollars ($5 sign up bonus + get paid to take surveys), Ebates (earn up to $40 cash back), YouGov US Males ($2 bonus + $8 – $10 per hour), MySurvey ($2 sign up bonus + 5 per survey). See this blog post for a complete list.
- Sell your stuff on Decluttr. Do you have CDs, DVDs, Blu-rays, old cell phones and games you don’t want anymore? Then sell them through Decluttr! Decluttr is the fastest and easiest way to make extra cash by selling your unwanted CDs, DVDs, and more.
- InboxDollars pays you in cash to watch fun videos, take surveys, play games, shop online, search the web and more.. They’ll also give you a $5 bonus for free just to give it a try. By spending just 5 to 10 minutes on your free time, you can earn $50 to $70 a month with InboxDollars.
- Swagbucks. Just as Inbox Dollars, Swagbucks pay you to watch videos, shop online, take polls etc.. Also by signing up through my link , you will receive $5 for free for signing up.
- Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. Also, when you sign up through my link, you’ll receive a free $10 gift card bonus to stores like Macys, Walmart, Target, etc.
- Sell your photos on shutterstock. Do you like to take photos for fun? Why not get paid for it? Shutterstock is a marketplace that allows you to sell your photos.
- There are many other side hustles listed in my post 16 Proven Ways to Make Money Fast.
2. Stop Borrowing More Money.
Adding new debt while you’re trying to get out of debt is not a good idea, because it can cost you extra interest payments. If, however, you decide to borrow, take a look at your budget first to see how much left over money you can afford in making payments.
Tip: I suggest that you check out Personal Capital. Personal capital is a great tool to track all of your finances in one place. It allows you to connect all of your financial accounts including your mortgage account, your bank accounts, your investment accounts, your credit card accounts, your retirement accounts, etc. The good thing is, it’s totally FREE.
3. Make a Payment Plan and Learn to Stick to It.
4. Pay Off Your Debt Starting With the One With the Highest Interest Rate.
Of all types of credits, credit cards tend to carry a higher interest rate. So it only makes sense to pay off those debts first.
5. Pay More than the Monthly Minimum – Get out of Debt Quickly.
If you simply make the minimum payment, you will end up paying more in interest and it will take longer to pay off your balance. So make more than the minimum to pay your it off as quickly as possible.
If you can’t pay more the minimum payments, you can always call the loan or the credit card provider and ask them to reduce the interest rate on your loan or credit card. Depending on your credit score, whether you’re employed, and if you haven’t missed a payment, they can be more than willing to negotiate a lower interest rate.
6. Reduce Your Expenses.
One of the best ways to get out of debt and stay out of debt is finding a way to cut back on your expenses. The first thing to do is to review your budget to find things that can be reduced.
Fixed expenses can be a little bit harder to cut back on, but things like Cable or gym memberships can be cut back because you can certainly live without them.
7. Consolidate Your Debt.
If you have a lot of loans, you should consider applying for a debt consolidation loan to pay the others off. You then have to pay it back, but usually this type of loan carries a lower interest rate, assuming of course you have a good credit score. Use my link, if you are serious about reducing consolidating debt.
In sum, it’s very easy to get into debt, but harder to get out of it. However, if you are spending way less than you earn, have a payment plan and stick to it, and reducing your expenses, you will be able to get out and stay out of debt.
See the following articles for more information