Financial independence is a challenging goal to achieve. Paying the minimum on a credit card each month can seem impossible when you’re already struggling to keep up with your other monthly obligations and put money away.
Getting out of debt doesn’t have to be an unpleasant experience, and there are many options available.
Here are some effective methods for eliminating debt which are outlined below.
1. Take on the help of a debt counsellor
Going under debt review with the help of a debt counsellor is an effective and streamlined approach to solving your debt problems.
With the help of these professional organisations, you will be able to have your payments reduced to an affordable level, receive a thorough debt counselling strategy, and best of all, debt counsellors conduct debtor negotiations on your behalf – relieving you of much of the stress involved in the process.
2. Attempt to pay more than the minimum requirement
Examine your spending habits and figure out how much additional money you can put towards paying off your debts. If you pay more than the required minimum each month, you will not only save money on interest but also get out of debt more quickly.
3. Consider debt refinancing
You might save hundreds of Rands in interest payments and make progress towards paying off your debt more quickly if you refinanced your loan at a lower interest rate. You can refinance mortgages, auto loans, personal loans and school loans.
A debt consolidation loan is a personal loan that may come with cheaper interest rates than your previous loans. If you already owe money on your credit cards, you might want to think about moving that debt to a balance transfer card instead.
4. Put any additional money you receive towards your debt repayments
When you get money back from your taxes or a check from a stimulus package, put it towards paying off your loans rather than putting it in the bank or spending it on yourself.
You have the option of spending the full amount on your debt, or you could divide it in half and put one half towards your debt and the other half towards something pleasurable, like an upcoming vacation or an expensive dinner.
Other unanticipated funds, such as inheritances, work bonuses, and monetary presents, can also be utilized to speed up the process of paying off debts.
5. Restructure your budget where possible
You can pay off your debts more quickly in one of two ways: either increase your income or decrease your spending. while picking up a part-time work or a side hustle won’t be possible for you right now, but you may still make some adjustments to your budget.
To begin, go through your budget item by item and prioritize each one based on how essential it is to your overall goals. Determine whether each individual item is a requirement or a luxury, and emphasize the costs that can be cut back or eliminated entirely.
Make the necessary adjustments to your budget, and then utilise the money that you save to make additional payments towards your financial obligations on a monthly basis.
