By Martin A. Smith, CRPC®, AIFA®, President, Retirement Planning Financial Advisor™, Wealthcare Financial Group,...
If you find yourself in debt, you’re not alone. According to a 2017 article by CNBC News, 157 million Americans have credit card debt, while 44 million have student loans. Being in debt is overwhelming; however, by implementing the following tips and practicing a lot of patience, you will be on the right track to a brighter financial future.
Clean Out Closets and Sell, Sell, Sell
There’s probably a lot of undiscovered cash lying in closets, basements, attics, and garages. Take inventory of these spaces and collect items you no longer use or need. The bike in the garage you no longer ride? Sell it! The box of dishes in the attic you never use? Sell those too! Whether you sell on Craigslist, eBay, or have a yard sale, selling items is not only a great way to raise cash, but it also helps to declutter.
Get a Side Hustle
Earning extra cash by getting a side job is a fast way to pay down debt. This doesn’t mean you should work an additional 40 hours a week. Part-time jobs, like walking dogs and being an Uber driver on weekends can add funds and still allow some time for yourself. To make it seem less like a chore and more like a hobby, your side hustle should be something you enjoy.
Consolidate or Refinance
If any of your debt involves high or variable interest rates, it may be worthwhile to consider consolidating or refinancing with for a lower and/or locked-in rate. These options may involve fees, so it is (generally) a better option for loans you won’t pay off within the year. Even with the added fees, you’ll be further ahead than dealing with a fluctuating rate, which has the potential to make a payment unmanageable.
Work bonuses are often few and far between but when they do happen, they are another source that could go toward debt payments. The same goes for overtime pay and tax refunds. While it’s tempting to treat yourself and your family, you’ll have more resources to do fun things once you eliminate your debt. This doesn’t mean you shouldn’t celebrate in some way; carefully choose a fun outing, such as a weekend trip versus a week’s vacation.
Attack One of Two Ways
Many people choose to tackle the smallest amount of debt first. Simply by seeing traces of it disappear, this provides a sense of accomplishment and motivation. Others choose to start by paying down the debt with the highest interest rate. How you plan your strategy, depends on your personal situation. No matter which path you choose, always try to pay more than the minimum.
Don’t Be Afraid to Ask
Don’t be afraid to ask for a raise. The worse they can say is no, but you don’t know if you don’t ask. Do some research and develop a strategy before jumping in to ask. Being prepared will make you more confident and less nervous.
It IS Possible to Get Out of Debt!
Research and read inspiring stories of others who have tackled this field and won. It IS possible if you stick with it, and remember that it is more like a marathon than a sprint. Remain focused on the end result, and the hope of a better financial future.
Information appearing in this article is obtained from sources we believe are reliable. The information may not be a complete statement of all available data and is not guaranteed as such. Marine FCU is not responsible for the contents of this article and advises its membership to investigate claims before following the information provided.