Debt is an increasingly common situation for people in all walks of life. Regardless of how much or how little debt you are in, the effects can be tremendous, such as stress and anxiety, limiting your lifestyle, preventing significant life purchases such as a new car or home. Ultimately, left unchecked, a big debt can result in being chased and harassed by debtors and even end up in court if you are subject to a debt related lawsuit.
Once you’ve taken the time to explore your debts, look at the types of debt you have (credit card, mortgage, etc.), put them into a high interest priority order to decide which debt to attack first, and put together that all important budget spreadsheet, then it’s time to get creative with your repayment strategies. In this article we take a look at three lesser known ways of reducing the amount of debt you are in and being more efficient with debt repayments.
1. Pay off lump sums with any windfalls
It’s so tempting to treat that work monthly bonus, top sales person bonus or Christmas bonus as extra money that can be lavishly spent on big ticket items, holidays and even gifts for others, but the best gift you can give yourself and your family is actually a lump sum off your debts. This is an opportunity to reduce your overall repayments, reduce the interest and get to the end goal even sooner, so take it. The more you can pay off in one go, the better.
2. Reduce the temptation to shop online
If you’ve managed to rack up a lot of your debt by making lots of seemingly innocuous payments online for items or services, then it’s time to start removing all the credit card details from the online stores you visit the most. It’s all too easy to leave our details on their systems, making it a simple one-click process to add more debt to your credit card. If you swap out your credit card for a simple checking account card number, then you will not be so tempted to add more debt whenever you are tempted to make an impulse-buy on your smartphone.
Top tip: Whilst employing some of these repayment techniques can help you dramatically improve your repayment schedule, there will be times when debt has spiraled out of control and you may be overwhelmed by the task of getting out of debt, especially if you are the target of a debt related lawsuit. It is imperative that you always seek professional help for serious debt lawsuit situations. There are numerous debt reduction and debt legal experts out there who can assist you through an otherwise stressful task.
3. Make extra cash from unwanted items and gifts
You may not really like that handbag you got from Aunty Maud for your birthday and you may no longer need that chair in the hallway that’s gathering dust, but you could be sitting on a lot of extra cash if you put your unwanted items up for sale on Facebook marketplace, eBay or craigslist. The trick is to be disciplined with any proceeds you make, with the results going straight towards you debt repayments rather on more items for your home.