A Guide to Getting Out of Debt (2024)

If you have the right tools and motivation, getting out of debt isn’t as difficult as you would imagine it to be. There have been plenty of people in your position, and no matter how severe your debt and how bad your situation is, there is always a way out. When you use smart strategies and clever tricks, you can find the solution to get out of debt. This guide will show you how to adopt the perfect strategy and tricks to get out of debt fast. Here’s how you should go about it:

1. Build a Budget

The first thing you need to do is make the most of your money and build a budget that will be used to get you of debt. Having a financial plan will benefit you in the long run, and it is vital to allocate 50% of your income towards getting out of your debt. When you have established a budget, you will be able to keep track of your progress, and the best part is that you can always revise your budget later.

2. Get a Side Hustle

Let’s face it, getting out of debt can be tricky, whether it is student loans, credit card debt, bank loans, or a mortgage. Getting a side hustle can help you get more money to get rid of your debt. You can use your coding or web designing skills to take on some freelance projects and get some extra cash. The best part is that there are plenty of side jobs you can do from the comfort of your home, such as renting out a spare room to Airbnb or sell your old clothes or items you no longer use online.

Most people may find getting a side hustle or a second job exhausting, but you can consider it a short-term option to generate some extra funds. That will ease the financial burden on you and reduce the pressure to get out of your debt fast.

3. Use Extra Payments to Decrease Debt

You can decrease the payoff time of your debt by making as many extra payments as you can. It is a helpful technique to improve your credit score at the same time. When you make additional payments every month, your credit utilization ratio will decrease, which will work in your favour. You will manage to pay off your debt quickly and not worry about your credit score dropping.

4. Consider a Consumer Proposal

If your debt is crippling your finances and you are on the verge of filing for bankruptcy, the best option available to you would be to file a consumer proposal through this link: https://www.harrisandpartnersinc.com/debt-relief-services/consumer-proposals/.

It is essentially an agreement with your creditors that allows you to extend the time you need to pay back the debt. You can negotiate a reduction of your debt and gain more flexibility by spreading your monthly payments over an extended period. It is one of the safest and most efficient ways to consolidate debt.

5. Acquire a Second Loan

This option should only be reserved for the most desperate situations when you have no way out. Even though qualifying for a second loan may be difficult due to your debt or credit score, sometimes it is the best option available. The loan can be used to pay off your debts, and you can then work on repaying the bank or lender the amount of money you have borrowed from them. It is not an ideal scenario as you will be taking on more debt, but it can help you get out of a nasty situation at times.

Our Final Thoughts

Anyone can get into debt, whether it is due to bad investments, trusting the wrong person with your money, or letting your spending habits get out of control. However, you should never let debt dictate your life because there are numerous ways you can use to get out of debt. The options we have mentioned above can help anyone resolve their debt and secure a healthy financial future.