5 Tips to Get Out of Debt Faster

5 Tips to Get Out of Debt FasterWoman leaping from rock to rock

Living a debt-free life is a dream for many people. However, paying down debt is easier said than done.

Some people struggle to keep up with their monthly bills and become overwhelmed with the amount of debt they have to pay. In these circumstances, it’s easy to “stick your head in the sand” instead of tackling the issue head-on. This approach only means you’ll be off track for longer, making it harder to recover.

In order to help you take back control of your financial situation, we’ve put together some common strategies to help you get out of debt faster. Please get in touch if you need help developing a customized financial plan, as the following options may not apply to your situation.

Pay more than the minimum monthly payment.

Paying only the minimum amount due will keep you in debt for longer. Paying more than the required monthly payment will help you save on interest and speed up the payoff process.

Cut down your expenses.

If you’re living paycheck to paycheck because of your bills, you might want to consider cutting down your expenses, especially your unnecessary spending and expensive habits. And while you’re living on a strict budget, use the money you save to pay down your debts.

Get a part-time job or a side hustle.

Earning more money can improve your capacity to clear your debts. You may have an untapped skill you can use to earn more. Check out outsourcing platforms online or see who else you can collaborate with.

Use the debt snowball method.

The debt snowball method works like this: first, list down all your debts from smallest to largest. Next, commit to make minimum payments on all loans except for the smallest one, which you should pay as much money towards as you can.

Once you’ve paid off the smallest loan, move on to putting all your excess funds to the second smallest while paying the minimum amount due for the others. Do this until you’re debt-free.

Use “found money” to pay off your debts.

“Found money” could be an annual salary increase, a bonus or commission, an inheritance, or maybe a tax refund. Whatever that may be, if you come across an unusual source of income, you can use the money to reduce your debt or at least commit a certain percentage of it.

Contact your Local Bookkeeper

With discipline and commitment, it is indeed possible to achieve a worry-free life without debts. However, if you need a more focused debt paydown strategy from an expert, get in touch with us today and let’s work out a plan for your specific situation.

Our friendly bookkeepers are personally invested in the success of small businesses in Australia and would love to be part of your journey to growth in 2021.

Get in touch to book a one-on-one consultation with our advisors and we’ll work out a plan to help you keep more money in your pocket.

Small Business Bookkeeping 

Justine Day: Southern Highlands / Bowral Bookkeeper
Petra Austing: Southern Highlands / Bowral Bookkeeper
Amanda Graham: Gold Coast Bookkeeper
Karin Evans: Gold Coast Bookkeeper
Pru Hall: Wollongong Bookkeeper
Jackie Short: Canberra Bookkeeper