Tower Loan Blog

Get Out of Debt: Plans for Financial Freedom

Every American has an average of $38,000 of debt. And that’s excluding home mortgages.

However, even though many people struggle with paying off their debt, there are steps that you can take to start steadily reduce the debt until you are completely free.

While there may not be a single best way to get out of debt, there are multiple actions you can take that can deliver amazing results when steadily applied together.

To help you get started, let’s explore eight of the most effective tips on how to get out of debt once and for all.

Supplement Your Primary Income

In order to speed up the process of repaying your debt, you might need to increase your income to cover the additional costs the increased monthly payments will incur.

Getting out of debt can be a challenge, especially if your current income doesn’t give you much flexibility for making outstanding payments.

So, your best bet is to look for ways to increase your monthly income and give yourself more room to pay off some of the obligations that you owe.

Now, if you already work full time, that may be a challenge, but there are always things you could do to supplement your income even by a little bit.

One idea is to look up potential gigs that you could do on your free time – whether it’s doing something on your computer, or getting out and working for a few hours every weekend, it can accumulate into a significant income that allows you to cover your debt payments, and more.

Optimize Your Expenses

Increasing your income is essential if you want to get out of debt fast, but it’s only part of the equation – you also need to find a way to reduce your expenses and save up more money each month.

When setting up a get out of debt plan, you should make a detailed list of all your monthly expenses and look at which parts you could optimize.

Whether it’s smarter shopping at the supermarket, going out less, or scaling back on some hobbies or activities, you may find that there are many opportunities to save money when you’re motivated to get out of debt.

Sell Everything Non-Essential

Everyone has a ton of stuff that they don’t need.

Maybe you’ve got an old guitar you haven’t played in years or even a second car that’s not really essential?

By selling some of the items that you own, you may find that a great way to pay off a significant portion of your debt.

Many people wonder how to get out of debt and struggle to make payments, even though by simply listing some of their unused possessions for sale, they could significantly reduce their financial burden.

Try to Negotiate Lower Interest Rates

You may think that the only ways to get out of debt involve you repaying the full amount, but in truth, sometimes you can reduce the amount you need to give back by simply calling up your bank or credit card company and asking if they could lower your rates.

If you have a solid history of making payments, you may find that you could get a reduction and even if not, the worst-case scenario is they say no, so it’s definitely worth asking.

Use Unexpected Money for Debt

Most people come across at least a little amount of unexpected income each year.

Whether it’s a bonus, an inheritance, a tax return, or anything else, you may find yourself having money that you didn’t plan for.

But most people don’t seem to consider the unexpected income when thinking of how to get out of debt.

However, if you want to figure out how to become debt-free, it’s to resist the temptation to spend it on an impulse buy and instead use that money towards reducing your debt, as that will be the most rewarding thing to do in the long run.

Eliminate Harmful Habits

Most of us have guilty pleasures that eat up a chunk of our monthly income.

For some, it’s online shopping, for others, it may be smoking or drinking, which is not only expensive but very harmful as well.

By eliminating these habits, you can take back control of your life and health and see your monthly balance increase in the process.

Ask for a Raise

Finally, if you still feel like you need a bigger income when figuring out how to get out of debt fast, you could try and ask your boss for a raise.

If you’ve been an employee for a while and have been meeting expectations, it is completely reasonable to ask to be compensated for your efforts in the form of a raise.

Once again, if you are tactful about it, there’s no harm in asking, and if you’re a valued employee, chances are your employer will say yes.

Final Words

There are multiple ways how you can work down your debt over the long term, and the ones listed in this article can go a long way when you’re looking for how to get out of debt quickly.

But if you need help making debt payments right now, most of these might not cut it. However, with the help of personal loans from Tower Loan, you can cover your current financial commitments and give yourself time to get your finances in order. To learn more, please online loans page and let’s get started as soon as today!