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9 Ways To Offset Your Debt With Ease

Nine Ways To Offset Your Debt

Debt does not have to take over your life. Paying it off can be easier than you might think if you adopt a few healthy habits that will help control and manage your money.

Know what you owe to whom, and figure out ways to redirect the money you earn to pay off those accounts. You can eliminate debt with a little time, patience, and diligence.

Here are nine steps from thebalance.com to enable you to pay off your debt faster.

Put yourself on a bare bones budget

This goes a step further than the dreaded “B” word. It is the Triple-B word, but do not let that daunt you.

Start by making a list of all your monthly expenses. Now eliminate anything that is not essential. Cross them out and redirect the money you have been spending on these things to your debt payoff. Only you know what you can conceivably live without.

Budgeting can be much easier when you see everything in black and white — how much you spend each month on each and every obligation. Some bills might be due quarterly, semi-annually, or yearly, so divide them into monthly increments.

Earn more money

Find out if your employer will authorise some overtime or get a part-time job. Do whatever it takes to bring in more cash. It does not have to be gruelling. You can pick up a side gig, such as driving for Uber occasionally, on your own hours and your own terms. You are not punching a second time clock. You are available when you want to be available. Explore whether you can actually make a little money off your hobby.

If even that feels like too much for you because you’re already working 65 hours a week, considering selling some of your belongings. Go through your closets, drawers, maybe even the garage or your storage unit if you keep one. Tag anything in decent condition that you have not used or even thought about in months and post those items on craigslist or eBay. Take some quality photos of the items if you really want to get top dollar which you’ll apply to your debt.

Shop smarter

Challenge yourself to get the best price possible on everything you buy. Look for sales. Clip coupons. Send in mail-in rebates. Do whatever it takes to get a better deal and keep track of your savings, then apply it to your debt.

Credit cards are the enemy

You might also want to tuck those credit cards aside. Leave them at home instead of carrying them with you, or at least hide them in the back of your wallet where you have to really work at fishing them out. This trick can be as simple as wrapping one or more rubber bands tightly around them. You will think about it the next time you are trying to free up all that elastic.

And what about all those online stores where you have stored your credit card information for frequent purposes? Delete that information. You will have to look up your card number to enter it the next time you decide to buy something, which gives you a little time to think about whether you really want to do so.

Try to confine yourself to cash purchases only. People tend to think more about what they are spending when they are handing over paper money for a purchase, just don’t forget to enter the expenditures in that list of cash purchases you have been keeping on your phone. You will still want a record that you spent the money.

Give yourself a specified amount every week as spending money. When it is gone, it is gone. Do not let yourself dip into the checking or savings account for more. Just make do. It is painful, but so is carrying a lot of debt.

Delay purchases

Make do with what you have, or do without it until your debt is paid off. This might mean buying fewer clothes or learning how to repair things around the house to make them last longer. You might even learn a new skill at the same time.

Take advantage of any windfalls

Did you get a raise or a bonus at work? How about a tax refund or birthday money? Make a habit of putting any unexpected money you receive toward your debt, maybe sticking it in that same savings account you set up to collect what you have shaved off your budget.

Look at it this way. If you have been existing on N7,500 a week all along and now you have been promoted and you are earning N8,500, you will not miss that extra N1,000 because you never got used to having it in the first place.

Plan your attack

Decide how much you can afford to pay toward your debt each month, then decide who gets how much first. There are two common strategies here: the snowball method and the ladder method.

The snowball method provides a feel-good approach. If you owe Lender X N5,000 and Lender Y just N500, clear that N500 balance first. Now move on to the next lowest balance. You will have the satisfaction and reward of paying off one, two, then more accounts on a somewhat regular basis, which can give you incentive to keep on going.

The ladder method involves starting with the account that charges you the most exorbitant interest and fees. You are just throwing that extra money away when you could be putting it to other bills, so get rid of those accounts first. Continue making minimum payments on other accounts until that nasty one is paid off and gone, preferably without using those. Now move on to the next highest interest rate and start the process all over again.

Get help from an expert

This should not cost you much because credit counselling is often free of charge or provided at very low cost. Have someone in the know review your budget with you. She may be able to point out a few strategies or options that have not occurred to you.

Stay motivated

Knowing that you are one step closer to being debt-free can be very motivating and a great stress-buster. Look at how much you have paid off rather than at how much you still owe. An optimistic attitude can keep you on the right track.

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