Debt is one of the most notorious budget killers to date.
Debt is, unfortunately, easily accumulated than paying it off.
In fact, did you know that an estimated amount of 300 million Americans have debt in some form or another?
What’s worse is that the inflation, which is when the interest rates rise, can make paying back what you owe so much harder than it must be.
But what if we told you that there are ways for you to reduce, and even flat out avoid, the debt you owe?
In this article, we’ll be covering a few ways to make managing debt easier and even avoid it outright.
Create a New Budget
Budgeting is the most important tool when it comes to managing your finances.
It’s also quite handy when it comes to reducing your debt as well.
First, you need to write down all your monthly expenses.
List off your grocery bill, how much you pay in utilities, your rent or mortgage payments, and what’s coming out in credit card payments.
If you want to have an exact measurement of, you’re paying each month, assess your bank statements from over the last year.
This is a great way to see exactly where your money is going to and provides you with better insight on what to cut out.
Any expenses, like splurges and eating out, should be greatly reduced or eliminated from your budget entirely.
The money you spend on coffee shops, restaurants and personal items can be put toward getting rid of your debt faster.
Apply for a Scholarship
Next to purchasing a house, getting a college education is the largest, most common form of debt you can get.
Many can accrue thousands of dollars’ worth of debt in such a short amount of time through college.
Unfortunately, we can’t pay off said debt just as quickly.
But who said you had to go into debt just to be educated? Instead of taking out a student loan, you can get a scholarship.
Scholarships are essentially a free college education with the only payment being that you succeed.
They’re fantastic alternatives to student loans and you can get yours by visiting an online search and application platform.
These platforms have thousands upon thousands of scholarships for college you can choose from.
You might think that you’re going to be spending quite a bit of time searching through everything.
Well, you’ll be pleased to know that you can significantly reduce the time by using their personalized matching feature.
This lets you filter out the plethora of scholarships with ones that will only benefit you.
However, we should mention that not every scholarship covers everything. There are a few that may help you finance half of the degree.
Put Everything You Can in an Emergency Fund
An emergency fund is a type of savings that’s used for dire situations only. You can never know when something unexpected happens.
What’s more is that not all these surprises are good. Your child may need medical attention, your car may need emergency repairs, and you might not have enough to pay off your recurring debt.
Not only can building an emergency fund help you in a pinch, but it’s also a fantastic way to build up your financial security.
Make Extra Payments When You Can
Making extra payments may sound impossible, but it’s something that can help you get rid of your debt faster.
If you have any additional funds to play around with, your best bet is to put it towards your loan payments and credit cards.
Another added benefit is showing the lender or credit card company that you can be trusted.
Building a good relationship with them can make it easier to get more funds.
