3 Ways to Wipe Out Debt Quickly

This guest post is from The Digerati Life.

No one likes having debt. I’ve got my mortgage to pay and a small amount on a balance transfer credit card. But other than that I’ve been pretty good at paying everything off and making sure I have as little debt as possible.

But for those who have more debt to contend with, debt consolidation is just one way of gaining control over your finances. There are a good number of strategies you can try to help manage your debt obligations. If you’re serious about getting your finances in order, I’ve got a few methods listed below that you can use to wipe out your debt as quickly as possible. Nothing new here, but the key here is to have the discipline and commitment to execute your plans.

1. Lower your existing interest rates. Don’t stick with the same old credit card you’ve had for ages if it has a painfully high interest rate. Spend some time looking around for something better instead — perhaps 0% APR credit cards may work better for you if you can transfer your balance to a card with a 0% intro rate and you can manage to pay off the balance during the intro period.

Debt consolidation is a good idea if it reduces the amount of interest you are paying. Find a good calculator and use it to figure out where you stand. Getting a read on your situation is the first step to improving your financial health.

2. Find ways to bring in more money and to funnel the extra cash toward your debts. You don’t need to take on a part time job: you could have a yard sale or you could try selling unwanted stuff on eBay. You can certainly make several hundred dollars quite easily just by looking around your home. Some enterprising people have even turned the sale of their clutter and second-hand possessions into a business.

You’re probably thinking that there’s no way you could make that much money doing this sort of thing. But you’ll be surprised to know that most people actually have several thousand dollars sitting around their home, tied up in items they no longer need or use. Why not make that cash work for you instead of sitting on it all the time? I made around $750 in a single week once, selling off a load of DVDs I no longer wanted.

3. Cut back on all luxuries for a fixed period of time. Use the cash you save to pay back your debts faster. We all have various luxuries ’ big or small ’ that cost money. Now while there is nothing wrong with enjoying luxuries, if you are currently struggling to pay down your credit card, then you could certainly benefit from giving your card a rest for a while.

Try canceling that gym membership or foregoing your subscriptions to your monthly magazines if you have any. Put the money you gain towards paying off your most expensive debt first. That way, you’ll quickly find yourself paying less on interest charges over time. Alternatively, you can pay off your smallest debts first; this way, you’ll gain a sense of accomplishment over wiping out individual debts faster. This strategy has the added bonus of offering you motivation to clear your debt even more aggressively.

I’ve found that it pays to tackle any debt you have as soon as possible. Before long, you’ll have more money freed up to feed your stock broker accounts. I’ve certainly fared better financially by adhering to this philosophy. Once you go down this road, you should be on your way to becoming debt free.

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Filed Under: Debt

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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.

6 comments
touchstonelofts
touchstonelofts

Really I think this is a great way to pay off 1 credit card at a time. and it's easier the way.

Isaac
Isaac

You could also list your stuff for sale online on www.PrivateGarageSale.com
It's absolutely free - no fees or commissions whatsoever. Just like a garage sale but goes on forever.

Credit Girl
Credit Girl

First things first, cut back on unnecessary spending. Everything can seem really overwhelming if you're racking up credit card debt so stop whatever you can and start from there... Then again, that's easier said than done.

Nicole UK
Nicole UK

Its easier said than done.. but really some fine advice for people in need of this. I like the ebay suggestion there.

Impulse Magazine
Impulse Magazine

I think it is best to payoff one credit card at a time until all of them are paid off

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