If you are in debt your main financial goal should be to get out as quickly as possible. After you are free from all debt, except maybe your mortgage, you can put your money toward more enjoyable things, like saving for retirement and the future, house renovations and improvements, a new car, or whatever makes you happy. The first step to getting there though is to pay off your debt. Here are 4 things you can do to help you pay off debt quicker.
Track Your Spending
Tracking your spending is one of the smartest things you can do to help you pay off debt quicker. After all, you can’t make an accurate budget if you have no idea how you are spending your money each month.
To get started tracking your spending, you can use a manual excel sheet, or an online app, like Budget Ease. Online tools like Budget Ease make it easy for you to track your spending no matter where you are and it can also create cool reports to help you analyze your spending and figure out where you can cut back in the future.
Create a Budget
The dreaded “B” word: budget. Having a budget should not feel like a bad thing. A budget is simply a plan for how you will spend your money each month. Of course, while you are paying off debt you should try to put as much toward debt each month as you possibly can.
Don’t forget that having a budget doesn’t mean you can’t deviate from it now and then. Sometimes unexpected expenses or awesome opportunities come up that you just can’t pass on. Living on a budget is important, but you shouldn’t let it keep you from living, and enjoying, your life.
Once you’ve started tracking your spending and living on a budget, you should make projections. Projection is just another word for goal. Having goals will definitely help you pay off debt quicker!
For example, I use my past spending averages and my average monthly budget plans to project when I’ll get my next debt paid off. Once I have a date in mind, I challenge myself to beat that timeline by reducing my spending or bringing in extra income and putting it toward that debt balance.
Another way you can use projections is the plan ahead for known expenses that are irregular. For example, if you pay your car insurance annually instead of monthly (which usually saves you some money), you need to make sure you are saving enough for it each month even though you only pay it annually.
Earn Extra Income
The final thing you can do to help you pay off debt quicker is earning extra income. Taking on a part-time job in the evenings or weekends, mowing lawns for your neighbors, babysitting, or starting a business online, all of these are great options to help you earn extra income.
Once you have extra income coming in every month, you need to make sure you stay strong and put it toward debt, not extra spending.
Can you think of any other things that can help you pay off debt quicker?- Kayla