Financial Freedom: Six tips to help you get out of debt

Oct 21, 2022, 10:02 AM by Nuvision Credit Union 

Financial Freedom

Having debt hanging over your head can be a downer. It’s also a significant roadblock to financial freedom. Becoming debt-free is a worthy goal, but it’s going to take some work. Here are some of our best tips:

Make a budget

Out of everything on the list, this is the most important. Paying off debt takes time, dedication, and planning. You should always know where your money is going, but when tackling a goal like this one, it’s especially important.

Sit down and outline your income and necessary expenses. Then, identify how much is left over. Ideally, everything that’s left will go towards savings and paying off debt. This can be difficult and requires a lot of self-control, so if you know you’ll have problems sticking to it, allot a small amount of money in the budget for wants. At the minimum, you should leave around 20% of your total income for savings and debt payments.

Keep your goal in sight

When the mountain of debt keeps growing, it’s easy to get discouraged. But don’t give up! Keep pressing on to the finish line.

Sure, there’s math involved.

The number might look big, but the major battle you face is not in the math, it’s in your mind. It’s deciding whether you should buy that cute shirt you really don’t’ need, or whether you should make coffee at home or get a more expensive, but convenient coffee on the way to work. Small choices add up, and cutting down on unnecessary expenses can help you put significantly more money towards your debt.

Pay more than you have to

Whenever possible, don’t just send in the minimum payment. Paying the minimum makes getting rid of your debt take so much longer, and causes you to pay more in interest in the long run. It’s worth it to get the debt out of the way now, rather than let it hang out while you spend unnecessary money elsewhere.

Pick up a side hustle

Cutting costs and saving money definitely helps, but it can only go as far as your income does. If you really want to pay off debts quickly, it could help to find some extra sources of money. You can do this by finding a second part-time job, or by setting up your own small business.

Think about all the skills you have. How could you put them to work? If you’re into fitness, you could consider becoming a personal trainer. If you have technical know-how, you could do freelance work in graphic design, web development, or social media. Other possibilities that are free to start include babysitting, housesitting, and tutoring.

Sell old belongings

Let’s be honest. Right now, there’s probably a lot of things lying around your house that you never use. It could be old clothes, furniture, jewelry, or that one random thing your aunt got you last Christmas—anything. You could earn some serious cash for getting rid of things you don’t really want anyways.

You have a few options for selling these items. The first is a good old fashion garage sale. If that isn’t something you want to do, post it on eBay or Craigslist, or try to list it in a Facebook yard sale group. Selling things online is easy, and often quicker and less-work than a garage sale.  

Get to the root of the issue

Debt doesn’t just happen on its own. Usually, something happens that caused you to fall into debt.

Maybe you lost your job and couldn’t afford rent. Maybe, you wanted a lot of things you couldn’t afford. Either way, the root cause of debt is spending more than what you make.

Protect yourself in the future by establishing healthy spending habits. Stick to your budget, don’t buy things you don’t need, and create an emergency fund. Put all your effort into managing your money responsibly, in a way that allows you to live well, but within your means.

The information contained within this article is for informational purposes and should not be considered financial advice. Everyone’s financial situations are unique and you should consult a financial advisor for assistance with your particular situation and goals.