How to Get Out of Debt and Get Rich in 6 ways

To get out of debt can be hard. It always  take a long time to pay bills and save personally for the future. But if you’re only making small payment to the creditors, you are collating your debt and it could take several months or years to be free from the bondage.

However, there are many proven ways to get yourself out of debt. In the article, I will journey you through how to get out of debt and get rich in 6 ways using a debt management strategy like debt snowball or debt consolidation to move out of the debt pit faster. Then if you’re ready to get out of the pit of debt, start with the following steps

6 Ways to Get out of Debt and Get Rich

1. Pay Enough than the agreed payment

Go through your budget and highlight your pay, if you observe you have much extra you can put towards your debt try and pay them. Paying more than the listed or agreed amount will save you money on interest and help you get out of debt faster.

For example, let’s say you have a $10,000 balance on a credit card with 15% APR and a $400 minimum payment. Let say you only make the minimum payment, it will take you about three to four years to complete the payment.

Paying about $3,500 in total as interest. Things like this can make it difficult to get out of debt; it is always advisable to pay more than the minimum payment if you have much extra.

2. Try using Debt Snowball

If you’re paying more than the agreed payment, you can also try using debt snowball, this method works as it will help in debt reduction. This snowball method will make you finish up all your debts except for the smallest one, which with time you’ll pay as much as you can.

This method will assist you to quickly move out of debt. Let see how debt snowball works. For example, let’s say you have $6000 credit card balance, a $1000 auto loan and $12,000 in student loans.

This method will allow you focus on paying off the auto loan first because it has the lowest total balance. Snowball method will assist you to focus on one debt instead of multiple which helps you to stay on track.

3. Restructure the way you borrow

Recreating the way you borrow will help you to get out of debt quickly. Lower interest can save you hundreds in interest and also help you repay debt faster. Try and recreate student loans, auto loans and personal loans. Restructuring the way you borrow can get you a lower interest rate and also help you reach the final touch faster.

4. Make More Money

One of the best way to get out of debt is to have more than one income stream. Making money here means looking for different ways to earn extra cash apart from your basic job. You can try doing part-time job, freelancing, or selling things you don’t need any more.

Go online and search for various ways to earn more income, example include taking survey at your leisure time. When you make more money, you’ll have more money to clear your debt and also assist you to become rich. How to Turn Your Hobbies into Money

5. Cut Your Expenses

If you want to get out of debt quickly consider this step. This is when you spend less money on things you don’t really need. It like reducing the amount table on your budget. You can do this by looking for cheaper alternatives to the things you buy, let say an item cost $50 dollar in the grocery store and a friend is willing to sell the same product for $30 go for the lower price to cut your expenses.

When you cut  your expenses it assist to free up more money to put towards paying off your debts and also helps to build your savings for the future.

6. Settle for Less than You Owe

Call the attention of the creditor and negotiate a settlement for your debts, even for a lot than you owe. This will allow you to take care of yourself and also keep you healthy while paying your debts. This will only help you pay a portion of what you owe and also assist to free up your mind, knowing fully well you no longer owed those creditors. Talk to your creditors to offer settlements and if they agree, write down the terms and condition.

Following this six steps will help you move out of debt zone and also assist you to build your wealth with time. Therefore learn how to priories the above steps.