Nobody likes debts! But people, you and I included, find themselves into debts despite the aversion. As such, it’s counterproductive just to focus on the fact that you do owe someone money. The best way forward is to find ways to reduce debts to be debt-free and financially healthy. Here are some of the ways.
“A small debt produces a debtor; a large one, an enemy.”
Take Stock of Your Debt
One of the known ways to reduce debts is acknowledging that you do have them. Then, determine the amount of debt you owe. This helps you have a clear picture, which informs you of the options or ways you can use to eliminate or reduce debts.
Next, list down all your dues. Have you taken out loans? Include the interest rates or other charges in the mix, too. Total everything to get the grand amount of your borrowings. After determining your total debts, you should work out how much you can pay off each month.
Consolidate Your Debts
It’s easier and a lot less of a headache to put all your debts together on one credit card, financial instrument, debt repayment option. It is wise to transfer your dues to an arrangement that offers 0 interest.
But sometimes, your arrears may be too substantial to transfer. Suck is the case of credit cards, In such a situation, transfer as much as you can to minimize losses.
Another move you can make is taking out a loan that can encompass all your arrears, which can be a bit more costly. On the upside, you can be sure that you’ll zap all those debts within a certain number of years.
Avoid Getting Into More Debt
Try and pay your bills and credit on time so that you “don’t rack up even more dues and affect your credit score.” Better yet, you can review your current spending habits and subscriptions and see which ones you can eliminate.
You can, for example, cancel your gym membership and just exercise at home or the nearby park. You can also downgrade your current utilities.
Avoid unnecessary purchases and take advantage of discount coupons. Consider other opportunities that and ways to help you reduce debts by buying what you need for less the price. You can also opt to buy in bulk to get more value out of your grocery shopping. You can even give DIY gifts instead of buying them to cut your costs.
Boost Your Income and Raise Money
This is one of the surest ways to reduce debts. You can engage in activities and strategies that allow you to earn more or have extra money. For example, sell the clothing or home items you don’t use. You can hold a garage sale for this purpose.
You can also get some part time work to boost your takings. You can sell cookies or pastries on Sundays, for example, or take an Internet-based online job. If you don’t have much for capital, you can offer your services, instead.