If dumping debt sounds like a great idea, make sure you check out some of our other finance tips!
Debt is costly, stressful, and creates a vicious cycle. However, it seems that most people just accept it as part of life. Living free from debt is attainable but it will take some work. Often change is required, coupled with some tough initial first steps. The good news is that small efforts in the right direction will pay off in big ways.
A few basic tips that I’d encourage you to do immediately include:
- Create a budget
- Begin to live below your means
- Read blogs and books that encourage debt-free living
These tips mean that a change could be necessary for your household. Dave Ramsey says, “Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change.”
If you are ready to dump some debt, then perhaps your life has become just painful enough to finally “quit.” If so, then it could be time to make some big and small changes. The first step is to create a budget if you don’t have one, and figure out where you spend your money. Often people are surprised to find out they could save in a few areas quite easily.
If you have a mortgage, student loan or medical bill, then you may not be able to just free yourself of that type of debt immediately. However, there are maybe some things that you get rid of fairly quickly with a little planning and effort.
Dumping Debt Examples
Check out these examples and begin to renovate your financial future:
1. Car Payment
Do you have more than one car? Consider selling one of them to pay off the other. Feel sure that you need both? I totally understand.
How about selling the highest priced vehicle to get rid of that high payment and buy something that you can pay in cash (yes, even if it’s a beater) or buy one that is significantly less payment wise. Think of the thousands of dollars of debt you could dump in one day!
2. Extras
As you create a budget, you see all the little random things you pay on right in front of you. It’s hard to escape the “extras” when you get it all down on paper.
Are you paying on random bills such as furniture, jewelry, electronics or some other “extra?” Can you give any of it back or sell it to reduce your debt? Work to get rid of any type of unnecessary debt that you can live without. You won’t miss the payments!
3. House or Apartment
Are you in over your head with a high mortgage or excessive rent payment? Move. Radical? Maybe. However, do you want to debt dump or continue to struggle with that burden? Who says you have to live in that home.
Maybe selling your current home would enable you to buy a different one that would have a lesser payment. Also, you could rent until you save up money to buy again. If you are renting, then consider giving your notice and find something less expensive at the end of your lease. Give yourself time to save and then make a better and more affordable choice in the future.
4. The Joneses
Don’t worry about the Joneses and focus on you and your family. The Jonses may be struggling with debt themselves. Either way, it’s not your concern.
Debt dumping can get a few stares and uncomfortable questions but don’t let that deter you. As you begin to gain financial freedom, you’ll be glad that you paid off some bills. Plus, you’ll sleep better without worrying about how you will keep the lights on.
Fast Results
Dumping debt can be a way to see quick results and give you the encouragement to spur you onward. Consider these examples and think through your financial situation and how you can reduce your debt. Despite the time and effort, it will pay off and you’ll be on your way to financial freedom.