If you do not have a plan, it can be confusing and frustrating to get rid of debt. But with the right steps, you can ensure that you get your finances in order. Finding more money to put toward your debt is a great starting place.
What to Do About Student Loans
If you still have debt from school, consider refinancing your existing student loans with a private lender in order to save on your monthly expenses. You might be able to get a lower interest rate, reducing how much you have to repay. You’re often more likely to have a good rate if you have a good credit score.
Bring in Extra Cash
If you want to pay off your loan faster, it’s a good idea to bring in more money, and there are a few ways you can do that. Consider finding a side gig or a part-time job. If you have an entrepreneurial spirit, you might decide to start your own small business. For example, you could sell crafts, take photos for people, or take care of pets in your area.
Getting a second, part-time job is another option. Don’t be afraid of getting a job that doesn’t pay a lot, even a little money will go a long way toward improving your finances. You might choose to wait tables at a restaurant, drive for a ride-sharing service, or do other small jobs. While it might mean giving up a bit of free time, it also means you’ll get out of debt that much sooner.
If you aren’t planning on driving for a ride-sharing service, consider selling your car. That’s especially true if you are making payments on it. If you are, you might be spending several hundred dollars each month. See if your family can get by on one vehicle while you are getting out of debt.
Bringing in extra money is great, but you’ll also want to try to save what you have. There are several ways you can reduce your spending without significantly affecting your quality of life. One of those is finding gently used clothing for you and your family. That’s especially helpful if you have kids in the home since they grow so quickly. Look for consignment shops and thrift stores. There are even online ones so you can order from the comfort of your own home.
You can also save money by using coupons for items that you already purchase. Just make sure you are getting the same number of items you would have purchased already. Even if it is on sale, it is not a good deal if it sits unused until it goes bad.
Finally, if you’re in a lot of debt, consider holding off on investing. You might even decide to avoid making contributions to the 401(k) account until your finances are under better control. But once you are free of debt and have an emergency fund, you can continue making contributions. Since you will be free of debt, you can put even more of your income toward your investments.