Are you falling behind and getting in debt? It seems like for many the magic debt number is $10,000. That’s when we start panicking and realizing there is a real problem.
But actually, with some simple adjustments, you can pay off that debt you have accumulated. It is really possible to pay off $10,000 of debt per year or even more, as long as you’re committed and you follow some easy strategies.
The first might seem a little obvious, but a lot of people don’t do it and that’s maximizing your income. It’s not a secret that the more money you have, the easier it is to pay off your debt.
The very first thing you should try to do is increase what you’re already earning. This might mean working overtime or taking extra shifts, or it might mean negotiating your salary for higher pay.
The most important thing is just that you increase the amount of money coming in and you put it towards your debt.
The second tip that you should do after increasing your income is to keep living like a student. If you have just graduated from getting your degree, don’t go out and buy a car or buy a house.
It’s better to just stay in the same apartment you probably already live in and keep the same bills you had as a student. By not inflating your lifestyle, your money goes a lot further, especially because you don’t have to pay tuition anymore!
When you are trying hard to pay off debt, it will require some sacrifices in lifestyle, but remember it’s only for a short time and you can absolutely do it.
You should be spending at least 15% of your net income on repaying your debt. If you’re not, it’s time to increase those payments until you are.
The third tip I suggest is to use cash windfalls towards your debt and what I mean by cash windfalls are unexpected large amounts of cash that can really put a dent in your debt.
If you paid for your school yourself, you may have tons of tuition credits at tax time. This means when you file income taxes; you usually get a fairly large return. Instead of taking it on a cruise or buying yourself something, put it all towards your debt.
This lets you pay off thousands of dollars in one payment.
If you receive any kind unexpected large amounts of cash, whether it be from a tax refund an inheritance or even birthday money, don’t blow it! Use it towards your debt.
Finally, one of the best things you can do is devote a single income stream towards debt repayment. This goes hand in hand with the earning more income.
If you can find a second or part-time job, or a hobby that you can do for money use that just for debt repayment.
If you can find a small but consistent income stream, direct that entire income towards paying off your debt and you’ll see the balance go down super fast.
Altogether, these strategies will let you pay off $10,000 or more of debt each year. It might not seem possible at this moment, but you can pay your debt off by focusing on the right strategy.