We all had to take out loans or borrow money from someone on some occasions in our lives. Debts can be a Personal loan, mortgage, student loan, car loans, or credit card payments, welcome to the club. As global debt grows close to 200 trillion dollars and student loans alone growing towards the one trillion dollar mark average income of an individual keeps hitting a new low, which makes people struggle to settle their debt. Read this 5 Easy Steps to Pay Off Your Debt:
Indeed, many resources will tell you to pay off the highest debt or the one who accumulates more interest. This matter is being more sensible mathematically. Paying up your debt has to do more with hope and motivation rather than mere numbers. The following are some easy tips you can follow to get the momentum in paying up your debts easily.
Steps to Pay off your Debts Easily
If you wonder how to pay off debts easily, this guide will give you some valuable ideas.
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Organize your Finances:
Organizing your finances can be scary at first. It may feel like you are stepping into an unknown territory but, trust me, this is the first and the most important step. This step can be done in a spreadsheet or with a simple app. The idea here is to get a bird’s eye view of your Earnings, Savings, and the debt you have. This method will help you to see how your debts fit into the bigger picture of your finances.
Gain more knowledge
Before you make that first step, you need to understand the strategy and direction you need to take on. Learning more about finances and how they work equips you with more knowledge and skills to manage money more effectively. Without this, your financial decisions may lack a solid foundation for success
Spend less money
Spending less money is very obvious. Start with using an app for money managing or any other method which will enable you to note down all your expenses, be they daily or weekly because “what is Measured is Managed.” If you want to pay off your debt, it is time to prioritize more on what is important and what adds value. Humans tend to buy stuff in a whim, not realizing how useless it is. Purchases are made what the eyes see. We give in to temptations and not top prioritize.
Earn more money and pay off your debt
An individual can make money or earn the most efficiently. Most people tend to earn more as they gain experience and master more skills in their chosen career path. If this isn’t your case, adding a passive income source is another great option for a person. One has to be driven and motivated to achieve a certain target along the way. There are many ways to earn a passive income if you can put in the extra hours along with your 9-5 job. Opportunities don’t come every time so, if it does make the most of it
Patience and Consistency
Mounting debt is a cause for worry in any person. Paying it off will not happen overnight except, of course if you strike luck by winning a lottery. Getting out of debt is a process, and you need to have faith in it. Having a short burst of motivation and inspiration will not carry you the entire way. Being consistent with the process will show results like compound interest. Once Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pay it.”
Following all these steps might feel unusual at first, but do not give up !. It will take some time to adapt to the rhythm with a budget that suits you. But, once you feel comfortable and get used to it, you will realize you’ve found the money you didn’t have. We hope you have enjoyed this post about 5 Easy Steps to Pay Off Your Debt.
Josh is the owner and lead writer at Daily Wisely. His career has taken him from finance to blogging, and now shares his insights with readers of Daily Wisely.
Josh's work and authoritative advice have appeared in major publications like Nasdaq, Forbes, The Sun, Yahoo! Finance, CBS News, Fortune, The Street, MSN Money, and Go Banking Rates. Josh has over 15 years of experience on Wall Street, and currently shares his financial expertise in investing, wealth management, markets, taxes, real estate, and personal finance on his other website, Top Dollar Investor.
Josh graduated from Cornell University with a degree from the Dyson School of Applied Economics & Management at the SC Johnson College of Business.