Can you get out of debt fast? The answer depends on two things. Firstly, the amount of debt you have, and secondly, whether you’re willing to make the necessary adjustments to achieve your goal.
According to Equifax Canada, the average debt per person was $73,532 as of September 2020, with non-mortgage debt sitting around $23,000 per person.
If you’re in a panic because your loans total more than this right now, don’t worry; it is possible to eliminate debt with a bit of hard work. Here’s how to get out of debt fast:
- Consolidate your debts: Managing several loans with different interest rates is time-consuming and stressful. You may often find yourself falling behind in payments and incurring late payment fees simply because you can’t keep track of all your bills. One solution to this problem is to consolidate your debts into one single debt. That way, you only have to worry about one monthly payment (which may even have a lower interest rate), making your life much easier.
- Look for a better credit card deal: If you have accumulated a lot of debt on your credit card, then consider a balance transfer to a card with a lower interest rate. Many credit card companies offer new clients a 0% interest rate for upwards of 6 months if you transfer your balance to them. If you can be sure that you will pay most or all of your credit card off in full before the interest kicks in, this is a great way to make a dent in your debt. Be sure to do your due diligence on what the new interest rate will be when the promotion ends and how long you have on the 0% interest rate.
- Cut your spending: There is no better way to get out of debt fast than to cut your spending and live frugally. Stop buying non-essential things immediately, reduce your expenses on entertainment and eating out, or trade in your current vehicle for a modest car that consumes less fuel. Put all of these savings towards repaying your debt.
- Pay for your purchases with cash or debit: Credit cards might make shopping easier, but it can also make it dangerous. With a credit card in hand, it is easy to forget your own financial constraints while focusing on the limit allowed by the card. This is why people spend more than they can afford. Also, it makes it easier to succumb to impulse buying. Paying for purchases with cash or a debit card makes you constantly aware of how much money you have and how much you can afford. If you’re an avid online shopper, consider paying for purchases with a Visa Debit card so that the money comes right out of your bank account.
- Use your tax refund to pay debt: As soon as you receive your tax refund or any other type of unexpected cash bonus, put it towards repaying your debts instead of spending it on a nice-to-have item. Your first priority should be to become debt-free as soon as possible.
- Find a source of extra income: There’s nothing like a bit of extra income to help you get out of debt fast. Find a part-time job, sign up to work in the gig economy, make money online as a freelance writer or graphic designer, start an at-home business, or offer services like dog walking and babysitting in your spare time. There are many opportunities to make extra money if you search hard enough.
If you want to get out of debt fast, contact Credit Counselling Services of Atlantic Canada today for a free consultation. We can help you get back on track and working towards financial freedom!
