3 Powerful Ways to Get Out of Debt Faster

Stop getting in the way of your financial freedom, don't keep draining your future savings. Debt is the number one enemy that robs people of their dreams, and most are completely helpless with their Debt. So now is the time to stop it.

The mistake that often occurs when in Debt is taking too much Debt and using it for the wrong purpose. Because debt results in draining savings, pledging property and digging holes and closing holes from one credit card to another just to be used to meet daily needs.

Most people might think that just because the bank or credit card company wants to provide a loan, they immediately think they can pay the loan back. People become too focused on the number of monthly instalments or interest rates on their loans rather than realizing that Debt is like cancer that can eat away at their financial health. Paying interest on Debt from time to time will only enrich the bank and credit card companies; otherwise, it will make us poor. Even so, we still wonder why we always run out of money.

I'm grateful. That discomfort may even save you from lifelong debt bondage. Money can't buy happiness, but your life becomes easier with money. But to earn money is not free; you have to work for it. It's a shame you can't work forever, and your life may even last long after you can't work.

We have been given a productive age for many years to deal with this natural process, but not many people realize it. Once they get a job and earn money, they immediately have a credit card. Instead of prioritizing savings and investment, they buy things that may even last a shorter life than the instalment payments.

Knowing the number of debt instalments each month is not enough, but more than that, you also have to know everything related to the Debt. Make a list to whom you owe, how much is the current balance or remaining Debt, the interest rate for each, and how much is the monthly instalment payment.

Also, find out about the conditions of your loan, for example, whether you can get a debt discount if you pay it off now or are otherwise subject to a penalty for paying off Debt before maturity.

From the debt records, then arrange a list of debt payments according to their priority. Arrange the priority of debt payments from the Debt that bears the highest interest to the lowest, not from the Debt with the largest balance, where the Debt that bears the highest interest ranks first in the priority of debt payments.

Why is that?

Debt with high interest is like having an accident and bleeding wounds in several body parts. The wound that causes the most bleeding will definitely be closed first by the doctor and then closed to other, smaller wounds. Because the wound with the most bleeding is not treated immediately, it will be life-threatening because this wound causes you to lose blood the fastest. We can apply the same logic to the priority of paying this Debt. But that doesn't mean we only prioritize one debt payment and ignore the others.

For example, if you have three credit card bills that have already swelled. Each minimum payment is $ 20 -. So the total minimum instalment payment for three credit cards is $60 per month. To quickly solve this problem, you are willing to set aside $ 70 per month for this credit card payment. Thus there is an excess of $10 over the monthly debt instalment budget. With the priority of paying debts, give this excess budget to payment of debt instalments with the highest interest rates. So the Debt with the highest interest rate is $30 while the other two debts with the lower interest rate are $20 each.

If the Debt with the highest interest rate has been paid off, then continue with paying Debt on the Debt with the next highest interest rate. Give the portion of the payment of the priority debt instalment that has been paid off earlier to add to the payment of the next priority debt instalment, and so on.

Although we already have a debt repayment priority strategy, this plan will not work if you continue to increase the amount of credit card debt. In other words, if you want to eradicate the bill of several credit cards that are bloated, then stop adding to the amount owed. Stop using credit cards and pay for your groceries with cash or your debit card.

Leave your credit card at home if you don't want to be tempted to use it. Use credit cards only for emergency purposes. If necessary, cut your other credit cards and leave one credit card with the largest credit limit just in case. Whatever method you use to get rid of credit card debt, it doesn't matter how weird it is. Do it as long as it can help you build good credit card habits. Maybe you will come across as extreme, stingy or old-fashioned. Well, it's you who suffer from prolonged Debt, not them. You are responsible for paying the Debt; other people may have been too busy with their debt problems.

Of course, doing these three steps to get rid of Debt is not easy, but many people have done it. As a result, day by day, they are getting closer to their financial freedom than watching them go away. I'm sure you want the same.