When someone falls into the debt trap, one of the most widely given pieces of advice is to increase your income. Doing so gives you more money, which can be used to pay off what you owe.
However, what happens when you simply can’t increase your income? How do you pay off debt now? Well, here are three ideas that will help you:
Slash Your Expenses
If you can’t increase your income to earn more money to go towards your debt, then what’s the next best thing? Spend less money so you can use the money you save to slowly eat away at your mountain of debt. It’s a very easy concept, and it will work over time. The key to success is making a budget and learning to stick to it. I found that the Time Money website has a really good article that explains how to do this. Feel free to head over there after reading this to check it out.
Essentially, if you can stick to your budget, you can set aside a certain amount of money every week/month. Make your budget a progressive thing, don’t immediately try and save as much as possible. Start by saving a little bit, then a little bit more, and so on.
Bring All Your Debts Together
I find that many people struggle to pay off their debts as they can’t manage each one individually. You’ve got companies from different places all screaming for their money with different interest rates at penalties. As a result, you find yourself falling into more debt, not paying it off.
But, as it mentions on the National Debt Relief website, you can get what’s known as a debt consolidation loan. This essentially brings all your debts together and pays them off. The loan pays each individual company, and all the debts get merged together for you to pay off as one single chunk.
Often, you can get better interest rates by doing this, and save money in the process. All in all, it makes debt payment far more manageable for someone that can’t generate extra income.
Stop Adding To Your Debt
Paying off debt is a lot harder when you keep adding to the pile. So, make sure you prevent yourself from doing this. If you’ve got credit card debt, stop using your credit card. Cut it up, and remove your payment details from all your favorite online shops. If you keep using it, you’ll just make the pile grow bigger and bigger, increasing your challenge.
Similarly, don’t be tempted to go for more loans – other than the one mentioned above – as they’ll put you in more debt. If you get a personal loan to pay off one of your debts, you just end up with more debt. Stop the pile from growing, and you’ve given yourself something to aim for. The debt won’t go up, so now you can work on making it go down, bit by bit.
If the tried and tested method of increasing your income isn’t possible, then any or all of these ideas will certainly help you reduce your debt.