Be Smart and Do GOOD (Get Out Of Debt)!

Debts are like holes in a pipe and if you don’t block them the water keeps gushing out from everywhere while the bucket remains empty. Here’s how you can get rid of debt!
Female using laptop with her head in her hands trying to cope with anxiety, worry, upset, stress
Be Smart and Do GOOD (Get Out Of Debt)!

In this article

Debts are easy to acquire but hard to get away, it may take just a few months to amass debt and years to settle.

Everybody has their own means of paying off debt. Combining strategies and abiding by it strictly until the debt is gone is one way to do it. Not many can handle debts and a starting point to get going, here are some ways to start off.

No More Debts Please!

Debts are like holes in a pipe and if you don’t block them the water keeps gushing out from everywhere while the bucket remains empty. Reducing your debts will stop things from looking worse because nobody can be debt-free the intention is to keep it within your hold.

As a first step towards debt reduction, avoid credit cards which are known for creating debts.

Let Your Monthly Payments Go Up

Paying less towards your debt balances per month will by all means delay the closure of debts. Adding to the woes is the exponential increase in interest rates that will increase the timeline for debt repayment.

If the debt is due to the credit card then no wonder the average credit card interest rate keeps going up every year. By increasing monthly payments one of the outstanding balances can be shown the door.

Emergency: A Life-Saving Kit

An emergency fund can save you from debt if you are not thinking about using it for paying off debt instead of diverting the funds to your savings account. These funds provide you with security during an emergency or a financial crisis. An ideal emergency fund is one that can help you sustain for six to twelve months. By default, try to add whatever you can into a savings account. Take help in the form of a payment app to meet your daily expenses and let the earnings be a part of the emergency fund.

Identify A Big Debt And Close It

A basic and simple approach to managing your debts is by focusing on one account and making a big payment each month before it is completely repaid. All the other minimum payments done for other accounts will only bring down the debt by a small amount.

Streamline and prioritize the payments one by one in descending order until all are paid off.

Look Out For Ways To Generate Money

Relying on your job earnings alone might slow down the chances of clearing debts. Think of freelancing or a part-time job, the earnings from which will solely be used for the monthly payments. If you continue paying smaller amounts the debts are not going away soon.

Plan your expenses carefully because every penny means a lot in the long run.

Mutual Settlement With Your Creditors

When you are ready to settle the debts, convince or request your creditors for a one-shot payment if you owe more money than the repayment period. Creditors who are fine with the settlement may also cancel the rest of the debt provided if your accounts are at risk of defaulting.

Other Ways To Address Debt

A fund that can come to your rescue at a time when you need the most is worth spending for and why not? Risky, but will definitely take off the financial pressure. A life insurance policy would have accumulated some cash, try if you can take out a debt. However, borrowing from an insurance policy as an option may affect the benefits at the end of its tenure and your beneficiaries.

At the end of the day, it all boils down to how soon you close the debts one by one because the accumulation of debts can eventually affect your financial savings and all the earnings will go into clearing it.

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!

👍👎
Karthik Viveka

Karthik Viveka

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts

debt negative impact

The demonization of debt and its negative impact

With the rise of social media as a source of information, it is easy to get carried away in the waves of trends and financial advice that one is presented with. But what is the reality of debt? Read on to find out.
debt tracker

Get rid of debt with a debt tracker

Unpaid debts can affect your credit score and become a hindrance in the path of acquiring loans or opening accounts. A debt tracker keeps a record of your debt; it can be in the form of a notebook, application, or spreadsheet.
get rid of debt

9 ways to get rid of your debt

The term getting rid of debt doesn't mean that you pay back the entire debt fastly, it means that you get rid of the higher interest rate debt and eventually reduce it. If you do not pay back your debt on time, it can diminish or reduce your credit score which will further create hindrances for you for getting more debt.
debt management plan

Debt management plan: Is it for you?

Are you overwhelmed by credit card debt? Here’s a way to pay them within five years.
medical debt

Medical debt: Right methods to repay it

Medical debt has also made people avoid medical care. This has made people develop complex and severe untreated physical and mental health problems.
debt relief

Burdened by debt? Here’s how debt relief can help

The scariest 'd' word can take you off a good financial course. What can debt do, you ask? Here’s what debt can do to you: It can eat up all your savings and use up all your monthly income. The heavy interest rates can keep you indebted for many years causing a lot of mental and physical stress, leading to breakdowns and health problems.

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: