If you are looking for ways to get out of debt as quickly as possible, your best option may be to cut spending. The money that you save each month can then be used to pay down existing debts, which will further reduce your minimum monthly payments over time. What are some worthwhile ways to trim expenses from your budget?
Stop Eating at Restaurants or Ordering Takeout
While everyone needs to eat, you can get by with a meal cooked at home as opposed to one ordered online or at a restaurant. If you do choose to order a pizza or sushi, make sure that you pick it up yourself as opposed to having it delivered. Delivery fees and tips can easily equal $5 to $10. If you eat out or have food delivered once a week, you could be spending up to $40 or more, which could equal a credit card payment.
Make Better Use of Your Cell Phone
You probably don’t need an unlimited data plan on your cell phone. You may not even need to pay for minutes if you are savvy about how you use it. These days, it is easy to communicate with friends and family members via Facebook messenger or other instant messaging sites. Therefore, you may not have a need to call or text an actual phone number. If you do want a phone number where people can reach you, WiFi calling apps may allow you to make calls or send texts for free.
Get a Roommate to Make Your Rent Payment Easier to Manage
If you have an extra room in your apartment, you may want to look for a roommate. He or she could help you lower your rent and utilities by 50 percent each month, which could translate to a savings of $500 to $1,000 a month. If possible, you may want to get a third or fourth roommate to further limit how much you pay to a landlord each month.
Switch From Credit Cards to Cash
When you use a credit card, you are making a purchase that you have to repay with interest. When you use cash, you simply make the purchase without any future obligation to a lender. In addition to using your credit card less, you may want to look into ways to consolidate your existing balances.
A credit card balance transfer may significantly lower the interest that you are paying to lenders each month, which could translate into lower monthly payments. Title loans, home equity loans or personal loans may also be effective ways to consolidate debts at a lower interest rate.
Ask About Debt Forgiveness
In some cases, your creditors may be willing to forgive some or all of your debt. Debt forgiveness generally happens when a debtor cannot make a payment or is unwilling to continue making payments. Typically, a creditor would rather take a partial payment to settle a debt as opposed to spending time and money chasing that money in court.
There are many easy ways to cut your spending each month without drastically altering your lifestyle. Whether you choose to stop using your credit card, alter your cell phone plan or make more of your own meals, you can save hundreds of dollars a month that can go toward paying down debts. This may allow you to save thousands of dollars in interest charges while shaving years off of your current repayment schedule.