Tired of struggling with debt? It’s easy to fall into the common debt trap, particularly with the high cost of living these days. However, if like thousands of others you have found yourself facing significant debt to pay off, there are ways you can get out of it.
Regardless of how much debt you’re facing, there is a lot of help available these days. Here, we’ll look at some of the best ways to get out of debt and achieve financial freedom.
Know what you owe
The very first thing you’ll need to do is know exactly how much you owe. For many people, this is the hardest step. It can be extremely daunting facing up to your debt level and seeing exactly how much you owe. However, without knowing the total debt, you’re not going to be able to work on paying it all off.
So, take some time to sit down and work out how much you owe to each of your creditors. It helps to also work out how much interest you’re paying on each debt and how much you repay each month.
Break it down
Once you know how much you owe, you can then break it down. Many people choose to repay their debts using the “snowball method”. This is where you start with the smallest debt that you owe, focusing all of your efforts on paying it back, while making minimum repayments on other debts.
Then, once that small debt has been cleared, use the money you were paying towards it, to knock down the second smallest debt and so on. Alternatively, you may find it more beneficial to start with paying off the highest interest debt first.
Change your accounts
You can often benefit from switching your accounts while you work on getting your debt down. So, if you have credit card debt, it could be worth transferring over to a balance transfer credit card. This gives you a 0% interest free period for a set amount of time. This allows you to pay off the debt, without incurring any additional interest fees. You can also switch to a better bank account which can help you to control your spending.
Owing a large sum of debt can understandably be worrying. However, the above tips will help get you started at paying them off. If you’re really struggling, don’t be afraid to reach out to a debt advise charity who will help you to figure out the best way forward