In a recent live event, 58% of respondents shared that “reducing or eliminating debt” was their top goal for the year.
If this is one of your top financial goals, here are some key ways you can speed up your debt freedom date.
8 Ways To Speed Up Debt Elimination
- Reduce Interest Rates Many people with substantial consumer debt do not realize that 50% to 75% of their payments are merely going to the lender as interest – greatly reducing their ability to lower their debt. If you have high interest rate credit card balances, consider transferring to a 0% interest card (like these 0% Balance Transfer Credit Card Offers). Is your mortgage interest higher than those listed at BankRate.com? If yes, consider refinancing the mortgage. It is amazing what a few hours of focus on interest rate reduction can do to speed up your Debt Freedom Date!
- Pay Raise Are you being compensated fairly? Check out Salary.com for current pay rates of positions similar to yours. Take some moments to document how you are adding substantial value to your organization. If it makes sense to have a conversation with your leader, do it! Nothing like some more income from your current job to speed up debt elimination.
- Tax Refund A tax refund might be an “interest free loan to the government,” but it also represents an opportunity to impact debt in a big way.
- Bonus A bonus can also help kill some debt. One great thing about debt freedom is it allows future bonuses to be used to fund future dreams – instead of paying for things from the past.
- Found Money From Better Budgeting When I started preparing and living by a budget, it literally transformed my finances. I freed up hundreds of dollars that was going to “miscellaneous cash withdrawals” and impulsive grocery shopping trips.
- Sell Some Possessions Sell the boat, motorcycle, extra car, and collectibles. Eliminating possessions will free up space, eliminate stress, and greatly speed up your pace toward accomplishing debt freedom.
- Overtime If you have the chance to work overtime, it can really help speed up debt reduction. Plus, you’ll be too tired to spend the extra income on frivolous things.
- Second Job If you don’t have the opportunity to work overtime at your existing job, take a second job – or start a small side business. The key here is to focus on something that is short term. You don’t want to sign up for a permanent second job. Instead, commit to applying all additional money to your debt elimination plan. The reward when you become debt free? Quitting the second job and still prospering because you’ve freed up all of the money that was previously committed to payments.
You can do this!
Read the How To Pay Off Debt Series