While we all come by
our debt in different ways, most of us have thousands of dollars worth of debt
to manage. Searching for ideas to put a dent in your debt? Read on for seven
effective ways to cut your debt in half.
1. Calculate Your Net Worth
Debt can seem particularly overwhelming, but if you know where to start, you
can find your way to the finish line. Begin the process by calculating your net worth. This net worth will be the entirety of the property and assets
you own after the debt you owe has been subtracted.
For example, if you own property that is valued at $500,000 but your debt is
$300,000, your net worth is $200,000. Regardless of what your net worth is,
getting an accurate number of the amount you owe and how much money you have
will help you better understand how you can pay your debt off.
2. Don’t Add to Your Debt
If you are already in debt, adding to your debt only drives you further into
debt. As tempting as it might be to open another credit card or use existing
credit cards, you need to do everything in your power to avoid taking on more
debt. The sooner you realize how counterproductive adding to your debt is, the
sooner you can start making progress in paying down your debt.
3. Save More Money
The reason you’re in debt is likely because you used your credit cards when you
didn’t have the cash to pay for certain things. While it may seem to make more
sense to spend your saved money on your debt, it’s important that you have an emergency stash of cash so you don’t end up continuing this
debt cycle in the event of another emergency.
4. Create a Plan
If you hope to be productive in your debt repayment, you need to start with a
plan. While you can read hundreds of books on how to get out of debt, those
ideas may not work for you. Create your plan by listing each one of your debts,
along with the interest rates.
After you’ve compiled all your debt, decide how you will go about paying them
down. Some people choose to pay off the debt with the lowest balance while
others start with the higher interest loans. Once you have your plan, stick to
it.
5. Find Lower Interest Rates
Interest rates really serve to conflate the amount you owe. The longer you let
a debt sit, the more money you’ll have to pay. Instead of ignoring these debts
or agreeing to pay these exceedingly high interest rates, you can consolidate
your loans with Hornet Partners. With Hornet Partners, you can negotiate lower interest rates and ultimately pay off
your debt with one payment every month.
6. Budget Wisely
Just as you need to create a plan for your debt repayment, you should stick to a plan for spending your money. Your
new budget should cut back on most non-essentials, allowing you to dedicate
this money to paying off your debt.
As you look over your budget, look for any areas you can cut back on even more.
Spending money on subscriptions, entertainment, dining out, and the like are
things that can be cut back for the sake of eliminating your debt.
7. Earn Extra Cash
Another way to pay off more debt is to make more money. Even if you love the
job you have now, there’s always a way to pull in extra cash. Whether you sell
some furniture, pick up a part-time job, or use apps to find a few high paying
gigs, earning more money will help you take care of your debt faster.
Have a lot of debt to get rid of? Don’t get down on yourself. Decide to do
something about it today by using one or more of the above tips to start on the
path to financial freedom.