Let’s be honest – racking up debt and getting in over our heads financially is easier than we may realize. Between financing a car, a home mortgage, student loans, credit cards, and personal loans, before you know it, you can find yourself in a tight spot.
And this is fairly common. In fact, it’s estimated the average amount of debt per person in the U.S. is more than $90,000. Yikes. If you’re one of the many people with a mountain of debt and no idea how to begin paying it off, these four tips can help you start getting ahead of your debt today:
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1. Know Your Budget
An important first step to getting a handle on your debt is maintaining a monthly budget. This means you’ll need to make a list of the money coming in (income), as well as any money going out (expenses), and then compare the two. The difference between income and expenses will help you set a budget. It will also help you better understand where you not only can cut costs but also to which debt you can begin applying for extra money.
2. Cut Costs
As part of this exercise, you may discover you have extra expenses that can be cut. For instance, the gym membership you barely (or never) use. Or all the times you splurge on coffee when you have a perfectly functional coffee maker at home. And how about all those random subscriptions to services you may not even use anymore? Cut expenses where possible and build up that surplus cash each month so that you can start applying it to your debt.
3. Start a Side Hustle
If, after budgeting and cutting unnecessary expenses, you still find yourself much closer to the red than you’d like to be, consider taking on a side hustle. These days, side hustles aren’t hard to come by. From delivering food or groceries to dog sitting on weekends to writing articles for companies, with just a few extra hours of work each week, you can build up more cash and pay down your debts faster.
4. Keep Overspending in Check
To help stick to a budget and pay down your debt, you’ll need to keep overspending in check. Of course, this can be a bit tricky. However, Monorail has developed a solution to help you resist temptation when you’re tempted to overspend. By downloading the Monorail app, you can make a wish list of items you want to purchase and then track your savings toward each item. Once you’ve saved the money needed, you can purchase the item directly through the Monorail app. So easy! Plus, you’re likely to find a lot of satisfaction in knowing you’re staying within your budget and not taking on more debt each month.
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Little Steps Add Up
As the Tanzanian proverb goes, “Little by little, a little becomes a lot.” The little steps you take now will add up to big strides toward your financial goals in the future. Take some time to understand your budget. Cut costs where you can. Find ways to earn a little extra income. Then, apply as much of that extra cash as you can toward paying off debt.
Say you struggle with overspending or are just looking for a creative way to save toward future purchases without breaking the bank or accruing more debt. Then use money-saving tools to keep yourself on track. In time, you’ll see your debt diminishing – and probably your stress levels, too.