Debt can be really debilitating, especially if you have a significant amount of it. For many people the level of overwhelm that accompanies debts of all sizes is enough to convince them that ignoring it is the only option. However, debt doesn’t just go away you have to work to eliminate it. When you are trying to increase the financial fitness of you and your family, you need to take a real look at your debts and secure a plan to actively lower them. Below are three ways that you can consider when starting your own personal journey.
Reduce Your Largest Bills
You might think that you don’t have any wiggle room with your largest expenses, but the truth is, where there is a will there is a way. One great way to create some wiggle room in your budget that can be allocated towards debt repayment is to go down to one car. This will take some logistical thinking but with many people working from home these days, transitioning your household to one vehicle might be within reach. By selling your vehicle you are giving yourself a nice influx of cash that can be used to pay off some of your highest interest debt so that you are not continuing to pay and pay only to have most of your money going towards interest. Additionally, you are going to be reducing your payments on auto insurance and gas which will help create space in your monthly budget.
Renegotiate Large Loans
If you own a home, you probably already know that you can refinance your mortgage in some cases and find extra funds that way. But what about your other large loans? Things like student loans can in some cases be a huge financial strain on a family, but they don’t have to be. You can refinance your existing student loans to beat the next rate increase and utilize this new loan as a way of lowering your monthly expenses. The terms that you negotiated when you took the loan out originally are likely not at all indicative of today’s rates so investigating this is well worth your time.
Pick Up a Side Hustle
Many people are realizing that if they want to become debt free and financially secure, a side hustle is an excellent way to get there. The best part about a side hustle is that you can have almost complete control over the terms. If you are able to dedicate 20 hours a week to something like waiting tables in the evenings and on weekends, great, if you only have 5 hours a week to work as a freelance dog walker, that’s great too. Your goals will dictate how aggressive you need to be with your side hustle. Keep in mind as well that this doesn’t have to last forever. While many people enjoy the benefits of an additional income, some simply take advantage of the gig economy to reach a certain goal then go back to business as usual, the choice is yours.