How to get out of debt quickly? If you are like me, you are impatient when it comes to debt; therefore, you want to know, how to get out of debt quickly? To get out of debt quickly, you have to assess what is going on with your personal finances.
Having debt in your life can be extremely overwhelming and stressful. You may be in a situation where the debt is absolutely weighing heavy on you; however, you may not be aware that the debt is the reason for all of the turmoil you have.
- What are signs of this turmoil? If you find yourself not wanting to check the mailbox because you know it is filled with notices of past due bills; consequently, then debt is bogging you down.
- If you have bill collectors constantly calling your phone to collect on past due accounts constantly, as a result, these unanswered calls can be overwhelming when you do not face the problem and just ignore it.
- Avoiding the collectors calls may seem like you are solving the problem, certainly the debt problem is just growing.
Some people use the conflict resolution method of avoidance to deal with their being in out of control debt. Avoidance does not fix the problem, it actually only makes the situation worse overtime.
If you find yourself in a lot of debt, I applaud you for seeking out information on how to get out of the debt hole that you are in today.
What is happening to my money, I am not sure why I am in debt?
In this section, before we get into steps to get out of debt quickly, more importantly we will try to to identify what the reason is for being in debt in the first place.
We get it, Life happens, and if we do not have a financial game plan in place, it is very easy to get ourselves in a big financial mess.
Possible reasons that may have caused you to be in debt:
- Overspending
- Job loss
- Unable to work
- Income shortage
Do you have a overspending problem? To figure this out, it is time to get honest with yourself about your spending.
It is not out of the ordinary that you do not know if you do have an overspending problem or not.
Let us get to the bottom of this now, it is time to examine our past months spending by looking over bank statements, credit card statements, cash spending, and recurring bills.
Your past spending should be measured against a budget by category that contains everyday spending. In other words, your budget will have categories such as food, housing, and transportation to name a few as seen in table below.
| Category | Budget | Actual Spent |
| Food | $400.00 | $400.00 |
| Housing | $1,200.00 | $1,200 |
If you are saying to yourself, “Budget? What budget? I don’t use a Budget” no worries, we got you.
We will send you a free budget template to get you started, just register here and we will send you a copy of our budget template to download.
Looking at the Numbers a Little More Closely
Maybe your review of the numbers reveal, you do not have a spending issue. However, your review of past finances show that you were doing well with your personal finance, consequently when you were either unable to work or you lost your job you had to turn to credit cards to pay for living expenses.
On the other hand, maybe after your comparison of your spending versus the amount you get paid, you soon realize that you have an income problem. How do you know off the top if you have a money shortage or an income problem on your hands.
According to the Authenticated Government Information GPO, the poverty rate in 2020 for a household/family of one is $12,760 and for a family of four it is $26,200. https://www.govinfo.gov/content/pkg/FR-2020-01-17/pdf/2020-00858.pdf
Above all, if you find yourself in this pay scale bracket, and you are in debt, do not worry you have found the problem; however, you just need to get the income up. Then you will be able to get out of debt quickly.
Firstly, there are a lot of ways you can earn additional money so you can get out of debt quickly. Below we will discuss some of these possibilities. In short, we will now get into some steps to get out of debt quickly.
How Much Debt do you have Today?
Do you know the answer to that question? To get out of debt quickly you have to know how deep of a hole you are in financially. Above all, knowing your debt number is the first step you should take before trying to get out of debt quickly.
Gather all of the accounts you owe money on and write them down on a list what you owe. If you have lost track of past due accounts you will have to do some homework locating them. This may sum up your situation. Therefore, you do not not know where to begin to find what you actually owe then follow these tips.
Every year, consumers are offered a free credit report which contains all of the open and closed accounts you have. You can go to Experian to obtain a copy of your credit report. Here are a few more options available to obtain copies of your credit report from Transunion and Equinox. To sum up, know your debt number before you start applying the tips to get out of debt quickly below.
Increase your Financial Intelligence
Although you may not have a lot of money; without a doubt, your increasing knowledge about money is extremely important to the management of it. To be in management over money, you should be superior in knowledge over it, and remember that money is not in control of you. Some of the financial basics you should know about money are listed for your review .
What is an Asset? Well according to the Consumer Financial Protection Bureau… “An item with economic value, such as stock or real estate.”
What is Liability? As stated by the Consumer Financial Protection Bureau… “Something that is a disadvantage, money owed, or a debt or obligation according to law.”
Simply put, assets put money into your pocket and/or bank account. In contrast, liabilities take money out of your pocket and/or bank account.
Consequently, when you accumulate too many liabilities this is when you find yourself in too much debt with not enough wealth.
How to get Out of Debt Quickly? Stretch your Dollar!
If you are serious about getting out of debt, you have to control spending and find ways to increase the money you have. A good place to start with stretching the dollar is with food.
For instance, buy your recurring household items when they are on sale. Regularly, scan through the local grocery store Ad for items that you normally buy anyway.
Combing this method with cutting coupons can really make a big difference in your purchasing power. Make a game out of saving money by looking for an item you need or want to buy.
Investigate where you can Buy the item for the Best Price Available
Lowering your monthly expenses can allow you to get out of debt quickly. You will be surprised at how much money you can save from your current cable and internet provider.
Fore example, just go to the company’s website and look at the cable and internet specials advertised. If the price advertised is cheaper, call the company and request this deal. Most likely you will get this deal. As a result, the money saved can be put towards paying off your debt.
Cell phone companies are fighting for your business constantly. There is no reason why you should not be getting the best deal possible for your money today. Look around at deals available online and see how much you can save by switching providers.
The car insurance industry is another competitive market you can save big by shopping around. However, many people are still over paying when it comes to their car insurance. This does not have to be the case, shop this around and you will be surprised how much money can be saved annually by switching insurance. As a result, the net money saved can also be put towards paying off your debt.
Personally, I have saved thousands of dollars per year doing this very same thing. The money saved was used to expedite paying off my debt quickly.
Increase your Monthly Income to get out of Debt Quickly
In this section, we will want to focus on ways to increase our pay. The popular saying today is to create a side hustle. How do you create a side hustle? Answer, what are you already good at that you can turn into a business.
A skill you may already have is being great organizers and planner. As a result, you could start your own business as a planner helping those busy business people not so good at organizing.
Another great side hustle people use to earn extra money is babysitting. Starting a babysitting business can be lucrative. This is another venture people use to launch a business and earn money to pay off debt quickly. Lastly, landscaping is another great way to earn some good money on the side. Many homeowners are looking for a quality landscaper.
If you like researching and like being on the internet, you can start your own blog website. You can earn money by sharing your experience with products you know about, products you use, and products you love.
Get a part-time job. You can get a job at a pizza shop making or delivering pizzas. Delivery drivers have the potential of earning a tip, and this can lead additional cash you can throw at debt.
Uber or Lyft drivers make a decent amount of money part-time or full-time with their ride sharing business.
Open up your online store by selling items on eBay. eBay is another great way to earn extra money. People can start out simply by selling items in their home they no longer want on ebay to earn cash. Some people even go out in the stores or garage sales and look for deals to buy, and then they resale the items on ebay for profit. Fore more ways to create money check out this article on increasing wealth.
How to get out of Debt Quickly? Stop Increasing Credit Card Balance
Seriously, if you are in out of control debt, and you want to get out of debt then you must stop using the cedit card. Get the credit cards out of your wallet now! I know it is going to be tuff, but if you are serious, which I know you are, you will have to do this.
As you are doing things above to get out of debt quickly, the last thing you want to do is prolong this process by adding to debt each month. This can be extremely discouraging and make you give up on the process. You can stop the use of a credit card by establishing an emergency fund.
In summary, my number 1 recommendation for getting out of debt quickly is to create a budget. You can get a free budget template sent your email from us by registering for our newsletter. Here are some key take aways from this article:
- Examine your bank and credit card statements for recurring bills to build budget.
- Create a budget for all of your expenses.
- Once you make this budget, track your spending for each category you created.
- Do not put yourself down when you mistakenly calculate a category and go over budget, this is normal in the beginning, just make adjustments.
- Get a complete list of all of the past due debt accounts you owe.
- Earn extra money to get out of debt quickly by creating a side hustle.
- If you want to skip creating your budget, register here and we will send you a budget template for free to download.
We would love to hear your story, please comment on your journey on overcoming debt!