Free Again: What Options Do You Have to Get Out of Debt

Get out of debt

Paying off debt can seem impossible. If you had money to pay it off, you wouldn’t be in debt in the first place, would you? But emergencies happen, life changes, and our behavior with money evolves. Anyone can get out of debt; the avenue you choose and how long it takes to get rid of it are the only differences. Here are a few ways to make it happen.

Scaling Back – Way Back

If we’re on a fixed income, we’ll have to divert funds toward that debt by eliminating other expenses. People who live in populous areas with public transport can manage to sell any vehicles they may have.

However, if your debt is extensive, and you’re really feeling the impact, a major lifestyle change might be in order. You may choose to move to a place with reduced rent, or, as is common in these times, back in with a parent or family member.

No one is particularly excited about doing so, but this is a good way to nuke your debt in a year or two. What do you spend on rent now? Give half to your gracious host, and use the rest to pay everything down. It’s a straightforward strategy.

Counseling and Consolidation

A lot of people get into debt because they’re just not very financially savvy. In these cases, it’s best to leave some of the strategizing to those that do know the ins and outs of debt.

A credit counselor can help you figure out once and for all what you owe, and how you should budget. They can also discuss your options with you at length, bearing in mind your unique circumstances.

Debt consolidation and counselling can often be found via one organization. For example, https://www.nomoredebts.org/debt-help.html offers both. With consolidation, you can make one payment per month that goes toward all of your debt.

This is a good option for those who become confused or stressed out when piles of bills arrive every month. It also helps those who have trouble sticking to or fully understanding their budget.

Laddering AKA Stacking

Let’s say you have a few different forms of debt, and you’re comfortable handling it yourself. Furthermore, you cannot or will not make huge lifestyle changes – you just want to get a bit more serious about attacking balances. Debt laddering, or debt stacking, might be right for you.

What you do is compile a list of all your balances. The key is to rank them from highest to lowest interest rate: the highest interest rate is at the top of your list. Now, figure how much you can spend each month paying off your debts.

Pay the minimum on everything below the highest-interest debt. The bulk of your debt budget goes toward the most interest-rich lender. When that’s done, move on to the next lender on the list.

What option you choose depends on a variety of factors. How much time do you want to spend paying down debt, what are you willing to give up, and are you comfortable handling money? Be honest with yourself, and in the meantime, come up with a plan for avoiding future debt.

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