Being under debt is not a pleasant experience. Your credit score plummets, you’ll find it difficult to take on loans, and it will get worse when a collection agent comes after you. Bottomline – having too much of debt is not good, you want to avoid it, and if you are deep in debt, you need to get out of it.
Here are the best tips that will help you reduce debt.
Budget
I can’t state this enough. If you haven’t created a budget, now is the time to do so. A budget is THE best way to gain control over your finances. With the budget, you are able to calculate how much income you are earning and where it is going. Once you have that information, things snap into perspective. You’ll realize what you can and cannot afford and what spending you need to cut down on. Moreover, with a budget, you can effectively allot your spending, so you can manage your debt and income better.
Make more Income
If your finances are strained and you find it difficult to survive with your current income, you can only do one thing – increase your income. There are several ways you can do that:
– Ask for a Raise
If you are already working, you can ask for a raise.
– Work Two Jobs
Apart from your main job, you can take up a part-time one. Whether it be at a restaurant, or a logistical service, you have a lot of options.
– Work as a Freelancer
Outside of your main job, you can work as a freelance. It offers you many advantages from setting your own price to ensuring that the timings fit your schedule.
Throw in your Bonus
You may have been waiting for that sweet Christmas bonus, but you shouldn’t blow it away. Rather use it to pay off your debt. You shouldn’t stick to your monthly payment and you should try to push beyond that. Bonus is one way to do. The quicker you pay your debt, the better it is for you.
Lower the Interest Rate
You can ask the lender agency to lower the interest rate. The main reason why your debt is growing bigger is because of the interest rate charged on it. However, a lender agency is not going to lower it willingly. The lender agency might do it if you have a good or improved credit score. The other option is to explain your financial troubles and hope that they lower the interest rate.
Consolidate your Debt
Rather than fumble and struggle with multiple debts, you can bring them all together by consolidating them. Through this, you shift all the debt to the one which has the least interest rate.
Utilize these tips and don’t let your debt get the better of you. If it does, then you need the help of a debt consultant.
