Let’s face it, it’s fun to go shopping, go on vacation, eat at nice restaurants, and go out with friends every weekend, but before long, that can add up to a lot of debt. While using a credit card is great to earn rewards on the purchases you would be making anyways, that only works if you’re able to pay off the full statement balance on or before the due date, otherwise you start to get charged interest rate, which depending on the credit card, could be 16%, which hardly makes small monthly payments be able to chip away at any balance. So, you can free up extra money to finally devote money on penny stocks to watch, now is the time to get out of debt and put your hard-earned money into funding your future.
Put a Plan in Place
Getting out of debt is no easy task, but it’s worth it when you do finally come out on the other side. Take going to the gym for instance. You can have a resolution of losing thirty pounds this year, and may start off strong in the beginning of the year, but as months go by the visits become less frequent and pretty soon you are paying membership dues every month without going, and you didn’t hit your weight-loss goal. Same goes for getting out of debt, it will take time and discipline, but your hard work will pay off.
Try a Balance Transfer
Let’s say you have a credit card balance with a high interest rate. You could be paying hundreds of dollars a month in interest, depending on the balance, hardly getting rid of the balance, especially by making the minimum payment. If you can transfer a balance to a card with a 0% promo rate, you can hopefully pay off the full balance within that time, but just keep an eye on the transfer fee, it could be 3% of the balance, but probably would still be far less than what you would pay in interest in those 18 or so months you get for 0%.
Knock Out the Smallest Debt First
While sure it makes more sense to get rid of the debts with the higher interest rates first instead of wasting money to interest, but it can take a long time to see results, so instead of getting frustrated, you could pay off the smaller one first, see that go down to zero balance, and give yourself some motivation to continue on your debt-free journey. Getting out of debt will not happen overnight, so if you can see results that you are headed in the right direction, it may help.
Really the best way to get out of debt is to make larger payments so you can chip away at the balance more quickly, and by doing that you need to free up extra money somewhere, so spending should be taken under account right away. If you take a look at last months bank or credit card statement you can see exactly every dollar that is going out, to give yourself an idea of exactly how much you are spending, and where, so you have a place to start to look at to begin making the necessary cuts.
Cutting expenses may not be the easiest thing to do, so you can start with the small expenses like a newspaper delivery if you are still getting one, but really where the most savings will come is if you can make sacrifices such as reducing going out to eat and opting for grocery shopping and preparing your meals at home instead. Next you could look at what may seem like even more of a sacrifice, cutting the cable cord, but as you realize how much you actually don’t watch all of the available channels, especially live, you can go with a streaming service for around $10 a month, not to mention getting an HD antenna for around $20 up front, and still get local channels, and you may never need to go back to spending a couple hundred dollars a month just in cable.
Earn Extra Money
If you’ve made all of the cuts you can and you still need to generate more money in order to get out of debt, then earning extra money may make sense. Whether that is picking up shifts with a second job during free time and weekends is an option, or you can go through your house and sell items that have been collecting dust or that you can now afford to part with.