Is this the year you said you would finally get out of debt? How’s it going? As we’re halfway through the year now and in the midst of a global pandemic, it would be understandable;l if you weren’t on track. However, you might be able to use COVID-19 to your advantage – of course, that depends on your current situation, and if you are out of work right now then all you can do is your best, try to stay on top of things and remember that this situation is not forever. However, if you are still getting paid your full salary or even 80% of it, and you’re saving on travel expenses, lunches, expensive coffees, going out drinking, going on holiday and buying new outfits then you could be in the perfect position to get out of debt. So, how do you do it?
Try the debt snowball method
If you can pay more than your minimum monthly payments on your debts, then try using the debt snowball method to speed up getting out of debt. Start by listing all of the debts you owe from smallest to largest and use any spare money you have to pay off the smallest balance but still making the minimum payments on all your larger debts. Once you have paid off the smallest balance, put that extra money towards the next smallest debt until you pay that one-off, and so on. Eventually, your small balances will disappear and free up more money to pay off your larger debts.
Get a Consolidation Loan
Search for debt consolidation loans bad credit to see if you can consolidate all of your debts into one loan. This will mean that you will only have one payment at a lower interest rate, which can be a great way to get your debt paid off. However, you will still need to create a budget so that you don’t build up new debt while you’re paying off the consolidation loan. The consolidation loan should also mean that you are able to save a bit of money every month.
Live on a bare-bones budget
This shouldn’t be too hard right now as you don’t have much choice, but if you really want to get rid of your debt faster, you’ll need to cut down your spending as much as you can. To do this, you can try using a bare-bones budget, which means you will cut your expenses as low as you can and live on as little money as possible for as long as you can. This kind of budget will be different for everyone, but for everyone, it should mean that there are no extras like eating out no cable television, or even Netflix. Basically, no unnecessary spending. While you’re living on this strict budget, you should be able to pay a lot more toward your debts. Remember, this is only a temporary way of living, so once you are out of debt or a lot closer to your goal, you can start adding more spending back into your monthly plan.