Fifteen percent of U.S. citizens think that they’ll be in debt for their entire lives.
Getting out of debt is one of the most important things you can do for your financial health. It will help you build wealth, lower stress levels, and improve your overall quality of life.
But how do you get out of debt?
Many people think their only option is filing for bankruptcy, but that’s not true. Although bankruptcy can be a way to eliminate debt, it’s certainly not the only option.
If you are wondering how to get out of debt without filing for bankruptcy, this short and simple guide is for you.
Set a Deadline to Be Debt-Free
One of the first steps to getting out of debt is setting a deadline.
This may seem like a silly step, but it’s actually one of the most important. When you have a deadline in place, you can work backward and develop a plan to get out of debt.
If there is no deadline, then your goal will be vague and less likely to be reached.
Draw Up a Realistic Budget
If you have spent years living outside of your means, you may not be familiar with the concept of a budget.
This is a plan for spending your money that accounts for all of your expenses and income. It helps you determine where you stand financially and how much money you can afford to put toward paying off debt.
Your budget should be realistic and provide a clear picture of your financial situation.
Track Your Spending
When you create a budget, track your spending so that you can see where your money is going.
This will help you make informed decisions about how to spend your money. It may surprise you to learn how much money you waste on restaurant meals when there are bills that need paying.
You can use your bank account, an app, or a website to keep track of where your money goes each month.
Stop Using Your Credit Cards
Credit cards are a major source of debt for many people.
If you use your credit cards to pay for necessities, you could dig yourself into a deeper financial hole. Stop using your credit cards until you can afford to pay them off in full each month.
Consider canceling your credit cards altogether and using debit cards instead.
Create a Savings Plan
If you don’t have a savings plan, now is the perfect time to create one.
Start by setting aside some money each month. Then increase your contributions as you get more comfortable saving.
This will make you feel better knowing that you have cash available for emergencies or unanticipated expenses.
Ask for a Raise
If you haven’t asked for a raise in the past year, now is the time to do so.
Make sure your boss knows how much you’ve contributed to the company and why you deserve more money. Be sure to write down your reasons for asking for a raise, so you can present them clearly and concisely.
If your employer won’t give you a raise, try looking for another job. You may find one that offers higher pay and better benefits.
Downsize Your Life
If you’re like most people, you probably have more stuff than you need.
If your finances are tight, consider downsizing the amount of stuff in your life. It may surprise you how much money you can save by getting rid of unnecessary items.
If you live in an expensive area, consider moving somewhere more affordable.
Cut Down on Expenses
If your finances are tight, it’s important to cut back on expenses.
Start by reducing the amount of money you spend on food each month. Then, look for ways to reduce the cost of your utilities, such as your water bill or heating costs.
You can also cut back on things like clothing and entertainment expenses. By cutting back on expenses, you can pay down your debt that much faster.
Look Into Debt Management Options
If you have a lot of debt, consider taking advantage of a debt management program.
These programs allow you to pay back your debts in one monthly payment that often includes an interest rate reduction as well. You can also look into consolidating your debts into a new loan with a lower interest rate.
Contact the King of Kash if you need an installment loan to pay off your debt.
Start a Side Hustle
If you have a job that doesn’t pay enough to pay off your debts, consider starting a side hustle.
Sell products online, work as a freelancer, or start your own business. You can also drive for Uber or Lyft, babysit for other families, or rent out extra rooms in your home if you have one.
The key is to find something that makes sense for you and that you enjoy doing. The more enjoyable the side hustle is, the more likely you are to stick with it and make some money from it.
Negotiate With Creditors
If you are having trouble paying off your debts, consider negotiating with the creditors that are owed money.
You can try to negotiate with them for lower monthly payments. You may also negotiate a longer period before the creditor charges interest on your debt.
Negotiating may not be possible if you are already in default on the debt. However, it’s worth a shot if you have been making regular payments but are still struggling to pay off the balance.
This Is How to Get Out of Debt Without Filing for Bankruptcy
How to get out of debt without filing for bankruptcy?
It depends on your situation and how much money you have to work with. But by following the above tips, you can get your finances in order, pay off your debt, and start saving money for the future.
For more debt tips and tricks, check out the latest articles on our blog.