Can you get out of debt fast? The answer depends on two things. The first is the amount of debt you have and the second is whether you are willing to make the necessary adjustments in order to achieve your goal. According to a forecast by the credit reporting agency TransUnion Canada, the average non-mortgage debt of Canadians is likely to hit $28,853 by the end of this year.
However, there is no need to be disheartened even if your loans total more than this right now, because it is possible to eliminate them with hard work. Here are some tips on how to get out of debt fast:
- Consolidate your debts: Managing several loans with different interest rates cannot only be time consuming; it can also affect your mental health. You will often fall behind in payments incurring late payment fees. One good solution is to consolidate your debts into a single debt. That way, you will have to worry about only one monthly payment which may have a lower interest rate, which will make your life much easier.
- Look for a better credit card deal: If you have accumulated a debt on your credit card, then consider a 0% credit transfer to a card with a lower interest rate. There are also pitfalls you must be aware of, such as huge transfer fees, limited time offer and higher interest rates on new loans. But if you choose the right deal, you may be able to repay your credit card debt faster.
- Cut your spending: There is no better way to get out of debt fast than to cut your spending and live frugally. Stop buying all the nonessential things immediately. Reduce your expenses on entertainment and eat outs. Trade your current vehicle in for a modest car that consumes less fuel. Put all of these savings towards repaying your debt.
- Pay for your purchases with cash: Credit cards might make shopping easier, but 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. What’s more, you will easily succumb to impulse buying. Paying for purchases with cash makes you constantly aware of how much money you have and how much you can afford.
- 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. These can wait until you have repaid your debts. Your first priority should be to become debt-free as soon as possible.
- Find a source of extra income: There is nothing like an extra income to get out of debt fast. Find a part time job, find an online job (such as a freelance writer or graphic designer), start an at-home business, or offer services like dog walking and babysitting in your spare time.
If you are searching for a way to get out of debt fast, contact Credit Counselling Services of Atlantic Canada today at www.solveyourdebts.com. We can help you get back on track and working towards financial freedom!