How to get out of debt

Most of us will have some level of debt; maybe student loans or perhaps some credit cards. It can cause a bit of anxiety to have these hanging over you at times, and the feeling of being debt-free is liberating, so if there is ever a chance to get out of debt, you should take it.

Use a settlement or pre-settlement

If you’ve had an accident, you may be eligible for a payment of money to compensate for an injury or loss of work. You could use this settlement, or your pre-settlement loan, to pay off some debt and live more comfortably. You may be wondering, just what is pre-settlement funding? Put simply; it’s a way of taking out some of your settlement money before the process has been completed – it can take quite a while to resolve fully. This is a really positive way of using a bad situation to turn things around.

Try not to rack up any more

Once you’re in debt, it can be easy for it to multiply. Once you’ve committed to try and get yourself out of debt, it’s essential that you don’t add any more on where possible. Cut up your credit cards and avoid buying anything on finance. If you don’t have the money right away, save up for it.

Earn extra cash

Try to earn a little extra money on the side, to put towards paying off your debts. There are plenty of ways to boost your income, from taking on overtime at work to starting a side hustle or even just selling off some of your unwanted belongings. Be sure to put this money towards paying off your debts, rather than seeing it as a bonus just to spend as you please, or you will be working so hard for nothing.

Pay off high-interest debts first

Anything you can pay off is a bonus, but if you focus on those debts where the interest rates are higher, you will be making your money go further as you go along. These are the debts that can start to snowball and it can be really disheartening only ever to be paying off the interest and not really touching the original amount, so be sure always to pay a little more than the minimum if you can.

Ask for advice

One of the worst things you can do when it comes to any form of debt is to bury your head in the sand. It won’t just magically go away (unfortunately!) and the only way you’ll be able to conquer it is if you start taking action. Make a list of all the debts you owe and come up with a realistic plan. There are spreadsheets, bloggers, organisations who can all help you feel motivated to pay off your debts, so make the most of the people around you.

The exhilaration of knowing that you don’t owe any money to anyone and you are totally debt-free is fantastic, and you can get there.

 

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