Getting out of debt may seem like an impossible goal.
However, you can enjoy debt free living with careful planning, even if you have been struggling for years to do so.
Here are some tips that will help you to get out of debt so that you can begin to keep more of your money in your pocket.
1. Sell Some Of Your Items
Take an inventory of the things you currently have in your house including your wardrobe. Do you really need all of them?
If you don’t, then it may be time to host a garage sale.
Simplify your life by selling furniture, jewelry, and clothing that you no longer need.
The money that you get from the sales can be used to pay off debt.
2. Cash In Your Life Insurance
Cashing in your life insurance policy is one of the more radical solutions for helping you to get out of debt.
However, if you are in deep financial trouble it may be a worthwhile option to start enjoying debt free living.
If you don’t have any beneficiaries, such as a partner or children that will get benefits from your policy, then it is a good idea to use the money available to pay off your debts.
It should be noted that this debt free strategy only works when you have a whole life policy.
It may also be possible to get cash off a whole life policy even if you have beneficiaries, so talk to your life insurance company and find out how much money you can get.
3. Get A Second Job
One of the best ways to achieve debt free living faster is to get a second job.
Even if your schedule doesn’t allow you to take on another job during the week, consider taking a job on weekends.
You may also want to consider getting your part time job online so that you can work from home. This would prevent you from having to make a second commute in the afternoon.
Here are a few jobs you can consider:
- Freelance writing
- Virtual Assistant
- Online English Teacher
There are several other opportunities available if you do a little research.
If all else fails you could try to negotiate a raise with your boss.
4. Increase The Percentage That You Pay
If you are putting less than fifteen percent of your paycheck towards your debt, then you should increase it.
Take an inventory of what you spend monthly.
Are there some things you could discipline yourself to live without?
If there are, then live without them and make higher payments on your credit card debt or other debts.
You may also want to put some of your social security income and your pension funds towards paying off your debt.
5. Try To Get Your Creditor To Reduce Your Debt
If you are in good standing with your creditors, it is a good idea to give them a call or pay them a visit, to see if they are willing to reduce your interest rate.
Many of them are often willing to do this, enabling you to get a great deal of savings that you can use to further pay off your debts.
6. Dip Into Your Savings For Debt Free Living
Dipping into your savings might be a little scary.
Savings are often a source of comfort just in case you have a rainy day.
However, if you do dip into savings and pay down your debts, more of what you earn will actually belong to you.
This will allow you to save back the money you used to decrease the debt in a shorter time span.
You should seriously consider using some of your savings to get debt free, especially if you don’t have a lot of dependents.
7. Make Use Of Your Tax Refund
When you get your tax refund you will probably want to use it for a shopping spree or maybe even a fun vacation.
However, if your goal is to enjoy debt free living then the best option is to use it pay down your debts.
If you are still on the fence, consider the fact that purchases and vacations only provide short-term satisfaction.
Paying down a significant amount of debt will bring you significantly closer to debt free living which brings long-term satisfaction.
8. Consider A Credit Card Balance Transfer
You probably get credit card balance transfer offers from time to time.
You may have never considered this to be a viable option.
However, if you transfer your balance to one of those offers of a zero percent interest rate credit card, for at least a year, you are looking at a lot of savings.
You can use those savings to further decrease your credit card or other debts.
While this is an exciting prospect you still need to be careful, this is one of those situations where you should read the fine print or visit the bank to have everything explained to you thoroughly.
You want to make sure the deal is legitimate.
9. Use The Law To Get Rid Of Debts
You can use the law to get rid of your debts and enjoy debt free living.
If your credit card debts are really overwhelming and they are at least seven years old, your state may have laws in place to erase the debt.
However, it is important to note that each state has its own set of rules and you will need to find out how things work in your state.
Some states will ask a debtor to forfeit certain types of debt once they are a certain number of years old.
Other states will simply bar creditors from suing you, for old debt after a certain number of years has gone by.
If you have been carrying some really old debts, then it is worth your while to find out if the statute of limitations has passed on these debts.
If so, you are free to forgo these debts without fear that you may be sued.
If you want more information on this, then you can contact your state’s attorney general’s office to find out more.
You may also make contact with the Consumer Protection Agency to find out if the statute of limitations law in your state can help you.
10. Shop At Thrift Stores And Accept Hand Me Downs
When you are in the middle of debt, thrift stores should become your friend, so that you can start your debt free living sooner.
Often you will find some good deals at these stores and the clothes look just like new.
If you have kids, then you will find affordable children’s clothing at thrift stores as well.
You should also consider accepting hand me down from family or friends if you feel comfortable doing so.
If you dislike buying clothes that are not brand new or hate hand-me-downs, you may want to consider shopping only when there are clearance sales.
11. Start Couponing
Sometimes, it may appear that collecting coupons is too much work, but when you are trying to enjoy debt free living its worth the hassle.
Collect as many coupons as you can and use them when you are shopping for groceries. If you are consistent you may be surprised to see how much money you can actually save.
Whatever you accumulate can then go towards your debt.
You may want to join couponing clubs and groups where you can get advice about the latest coupons and also exchange coupons.
12. File For Bankruptcy
This option should be a last resort if you want to get out of debt and begin debt free living.
However, if your circumstances are dire, then this is always a viable option.
If you have lost your job and have no other source of income and yet your credit cards, medical bills or other bills are piling up, then filing for bankruptcy may be a good option.
Chapter 7 bankruptcy will eliminate your credit card debts and Chapter 13 bankruptcy will reduce your credit card bills so that you can pay off your debts over a period of three years or more.
Getting out of debt and living debt free is a goal that everyone who is facing large amounts of debt aspires to.
However, unless you move from thinking about getting out of debt to actually working hard to get out of debt, you will never be able to get rid of your debts.
The key to achieving your goal is to be consistent.
Pay off your debts in small chunks whenever you can, you do not always have to have a large amount to put towards your debt reduction.
The fact is, small amounts of money paid towards your debt over a period of time tends to work best for most people.
If you would like to know more about debt free living and how to achieve it then check out our blog, where we have several financial tips that will assist you in your goal.