A crisis throws you off balance; it’s worsened when you are in debt. Being in debt alone is a crisis. It’s wise to fight one challenge, if not, depression and stress are inevitable. Whatever the reason for the debt; the best medicine for debt is to pay it.
The fact that it’s still a debt means that the payment options are minimal. A crisis aggravates the inability to pay your debts. First things first, you need to address the reason why you are in debt. Is it because you are living beyond your means or its just poor planning or it’s your expenditure is way above the income?
Whatever the reason, this is what you need to start dealing with. If not, you will pay the debts and still burry yourself in more of them. It is better to stay debt-free and broke rather than have some cash at hand yet you have debts all over. Here are a few tips you need to do to get out of debt
- Pay more than the minimum amount
In case it is a debt that you pay on a monthly or weekly basis then opt to pay more than the required minimum amount. It helps to reduce the repayment period which in most cases accrues interest.
Most of the loans charge interest on a monthly basis, you will notice the less the repayment period the less the money you pay. The overall effect of this is more money at your disposal which you can use to pay other debts.
- Get a side hassle to help you pay the debt
You are in debt simply because you are in deficit, right. It’s high time you now look for a part-time job to help you pay off the debt. Look at your schedule and check on any free time that you may have.
Use that time to get an extra income to get you out of this mess. There are many virtual jobs like data entry, online writing and virtual assistant that you can opt for to give you that extra income.
The advantage of working from home is that you save more money and time. What computer skills do you have? Do you know you can use them to earn more money and increase your financial base?
- Negotiate the interest rates to pay less
The possibility of a crisis affecting even the companies is very high. During this COVID-19 pandemic, most of the corporate entities have incentives that cushion their customers from the harsh economic times.
You can take advantage of that and renegotiate your interest rates. As much as it looks not-so-great deal, that single coin away from your payslip helps to pay off yet another burdening debt.
- Sell a valuable luxury or asset to help you pay off the debt
During the good financial times, people purchase appliances for the sake of it. Business experts tend to discourage this but it comes in handy at this time. Although you sell it at a lower price than the buying price but the cash can save you from that debt.
Is it a circular saw or a blender or a bike that you feel you can do without? Just look at valuable appliances and make a few adjustments including depth adjustments for the circular saw just to give you leverage in the bargaining power. If you have an option or you don’t need the saw anymore, sell it and pay off some of your debts.
- Live within your means
You accrued the debts simply because of the pressure to live like our peers and colleagues. Never repeat that mistake, accept your financial state and live within what you can afford.
If you have to do without the expensive hairstyle it doesn’t make you less human than opting for a cheaper one. Instead, you are there to save. Make tough financial decisions just to get out of the mess.
In case it calls for a change in the apartment just to meet the financial goals, why not move to a cheaper one? Have a self- evaluation of your financial status and have a to-do list that will save you a few coins to pay off a debt. Do not wait until auctioneers come to your door that when you start the negotiation process- you will be disappointed.