Best Way To Get Rid Of Debt

Best Way To Get Rid Of Debt – If you’re living in debt today, you’re not alone. In 2015, 29% of households in Australia were classified as over-indebted. Fortunately, you just need the right strategy to start working to get out of debt and start a new life today.

As with most financial decisions, there is no “right way” to eliminate debt. The most important step to eliminating debt once and for all is to just start.

Best Way To Get Rid Of Debt

A list of practical ways to get rid of debt in 2019 will allow you to finally free your finances. The hardest part is the first payment. Before you know it, you’ll be living happily debt-free.

Best Way To Get Out Of Debt

The first step is to make larger payments on your debt each month. Whether you have a personal loan, credit card or mortgage, you can benefit from finding less money each month for those payments.

These bills all have a minimum payment that you must make each month to keep track of your balance. With high interest rates, this means your debt will only create more debt if you keep up with the minimum payments.

However, that doesn’t mean you have to pay more than this minimum each month. Conversely, paying $20-$50 off the minimum can reduce your total debt.

An emergency fund is a safety net that protects you from further debt. It’s easy to turn to credit cards and loans if you’re stuck with an unexpected payment or financial disaster, but that will only lead to more debt.

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The only way to finally get out of debt is to create an emergency fund. These savings are set aside for things like home improvements, medical emergencies, and unemployment. With an emergency fund, you don’t have to worry about what happens if you lose your job tomorrow or your car breaks down.

An emergency fund is one way to stop borrowing for good. You know you don’t want to go back into debt, so this safety net will act as a protective barrier if something unexpected happens in your life.

When you’re paying off all your debts at once, it’s hard to keep track of everything. You don’t need to put pressure on yourself. In fact, these scattered minimum payments may not bring you any closer to success.

Instead, focus on paying off the most expensive debt first. These are the ones that will cost you the most, the longer they will take to pay off, so you should dedicate the biggest payment to this and only this. Keep making the minimum (or less!) payments on the debt balance until you have a lot of debt.

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This process has a name: the Snowball Method. Think of it as a snowball. Once you have the most significant debt of your life, you move on to the next payment. Like a snowball, you will gain speed until you reach zero equilibrium.

This is scientifically proven to work for you. According to a Journal of Marketing Research study, the Snowball method has motivational benefits. As you score more small victories, you gain strength to achieve your goals.

Take a closer look at your monthly expenses. We all want the latest and greatest technology, cars and luxury goods, but it can cost money we don’t have.

The best example of this is buying a car. It makes more financial sense to buy a used car because cars depreciate quickly. In fact, their value decreases by 10% as soon as you drive them. You can save thousands of dollars by purchasing a quality used car instead of a new luxury car.

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Another way to cut costs is to watch how you spend money each month. For many people, a portion of their monthly budget is earmarked for eating out or expensive travel. Consider reducing these costs by finding a grocery store near you or skipping that trip.

You might be surprised how much you enjoy cooking at home or how much fun it is to explore your own backyard. Remember that expensive does not mean better. Plus, these new savings will help you get out of debt for good. It’s something we all feel confident about.

Loan consolidation is a great way to consolidate all your current debts into one at a reduced interest rate. While this isn’t available for all types of debt, it’s worth considering if you’re paying off large consumer debts like credit cards.

With a consolidated loan, you don’t have to worry about accumulating any new debt while you pay off your single loan. You’ll save a lot of money in interest every month, and it’ll help you stay motivated.

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The key to making loan consolidation work for your finances is sticking to a savings plan. You need a savings-focused spending habit to take full advantage of this repayment option. You’ll have that balance down to zero in no time.

Getting out of debt is easier than you think, as long as you’re willing to make these important changes to your financial habits. From building an emergency fund to consolidation options, you’re just a few steps away from living debt-free.

Have worked with Australians for over 15 years and we’ve seen how it can change your life. Schedule a consultation today to find your way to a debt-free life.

Complete the contact form below to book a consultation or call us on 1300 368 322 for more information. Your success is just a few clicks away.

Best Ways To Get Out Of Debt And Achieve Financial Freedom

Debt Busters is an Australian owned company founded in 2005, since then we have been able to help thousands regain financial control.

Debt Busters is proud to provide a customer service manager to work closer to you and provide a higher level of service tailored around your situation. The average American has more than $90,000 in debt from all sources.[1] While debt can be a challenge, eliminating it doesn’t have to be a hopeless struggle. Here are eight practical ideas to help you get to debt-free status and stay there.

You definitely need to pay off debt to achieve a debt-free life. Fortunately, there are many ways to achieve this goal. Each of these methods has pros and cons, but all will help reduce debt and promote financial freedom.

Two popular approaches to debt reduction are the debt snowball method and the debt avalanche method. Read more about each below.

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Paying off debt by focusing on the highest to lowest interest rates is called the “debt avalanche” approach. Like an avalanche, this method attacks one place, the debt with the highest interest rate. When the debt is paid off, priority shifts to the debt with the next highest interest rate. When using this strategy, you must also pay a minimum monthly payment on all other loans.

This strategy is great for minimizing long-term interest exposure. However, it takes time to pay off a large debt in full. Still, the avalanche method can be a powerful tool for lower overall costs for those who stay the course.[2]

The snowball method focuses on the size of the debt. Like rolling a snowball, repayment starts with the smallest debt and works its way up to the largest debt. As with the avalanche method, the minimum payment amount must still be paid for each debt.

This strategy is suitable for those who prefer to see more immediate results and free up monthly funds. The momentum of paying off the debt in full can be rewarding. However, overall interest payments will be higher with this strategy because the higher interest debt may be your minimum debt. If all your debts have the same balance, this strategy will not work.[2]

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Note that both methods assume a stable economy. Although unexpected expenses or emergency-related expenses can come up unexpectedly, you can easily adjust your payments to fit one of these strategies.

High interest rates can make managing credit card debt a challenge. But there is help for those with credit card debt. The first step is to work on reducing your debt.

Another option is a credit counseling service that creates a personalized debt management plan to help you manage your debt. Many of them are state-approved and work with a variety of people and types of debt.

You can hire a debt settlement company, although you want to carefully weigh the pros and cons. These companies usually require a deposit into a special account to provide a lump sum payment, and they may ask you to stop paying your creditors.[3]

The No B/s Guide To Getting Out Of Debt

Interest rates on 15- and 30-year mortgages are historically low. Negotiating your mortgage rate depends on several factors, including your existing credit score and debt-to-income ratio. If you are looking for a mortgage, look for the lowest interest rates. Try to find other lenders that can beat the lowest

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