Debt can be a major source of stress and anxiety for anyone who finds themselves falling behind on past due payments. The damage that it can do to your credit score, your income (should your paychecks be garnished), and your stability can be serious.
However, there are ways to navigate your debt and work toward a debt-free life. If you’ve found yourself overcome with debt in the past or currently, here are three hacks for preventing and paying off debt that you can use to achieve financial freedom.
1. Take Your Finances into Your Own Hands
The prospect of analyzing finances when faced with debt can be paralyzing for some. However, even if you never look at your financial situation, not knowing won’t make it any better. For example, let’s imagine that you run a business that’s not performing very well.
Taking the time to purchase accounting supplies that you can use to assess your small business’s health is a great first step in your journey.
Things like tax envelopes, folders, common tax forms, and even software solutions like online tax filing can help you better organize your finances and stay up to date on your progress over time. Better yet, you can customize your file folders and office supplies to find that balance sheet, income statement, or supply expense report.
When you take your finances into your hands, you’re in a much better position to recover and avoid further financial consequences.
2. Ask for Help and Find Strategies That Work for You
Tackling mountains of debt requires external support. The best way to get the help you need is to reach out to a debt expert.
The right debt resolution company will work with you to understand your current financial situation, reach out to creditors to lower interest rates on your loans or debts, and establish a realistic repayment plan so that you can get out of debt.
Many debt resolution companies will also offer debt consolidation services and home refinancing support. All you have to do to get started is to jump online and look for a company near you. For example, if you live in New York, all you have to do is search, “NY debt relief programs.”
Of course, you may want to look for some repayment strategies that you can employ on your own, too. Many use popular debt repayment methods where they start with the lowest debt and gradually pay more and more or work on the loan with the highest interest rate and go down from there.
These types of methods, known as debt avalanche or debt snowball, can be useful in clearing out all of your existing debt. Others have done it, and you can do it, too!
3. Keep an Eye on Your Assets and Never Spend More Than You Can Afford
The key to staying debt-free after you’ve managed to pay off all your debts is to make sure that you’re on top of your finances 24/7. One modern tool that should be in everyone’s arsenal is a budgeting app.
The right budgeting apps will allow you to link all of your major accounts, create spending alerts and bill alerts, and view all of your activity at a glance. With this tool on your side, you never have to worry about overspending or making a financial decision you can’t afford.
Another way to take your finances into your own hands is to get a handle on own your debt if you find it spiraling out of control. A loan consolidation calculator is a great way to do this. Debt consolidation can help you lower your monthly payment, decrease your interest rate, pay off your debt faster, and save you money. This calculator helps you estimate savings and plans out your debt-free journey.
Debt is never pleasant, but it’s not insurmountable. Whether you’re working your way out of debt or you want to make sure you never go into debt again, use the three tips above to prevent and pay off debt more successfully.