If you’ve taken out one or more personal loans, paying off the overall debt that you owe can take a long time. Depending on how much debt you’ve racked up it could take months or even years to pay everything back. If you’re serious about getting rid of your debt, you may need to make some drastic changes. Here are 5 drastic changes you can make to free up money for debt repayment.
# 1 – Find Cheaper Housing
If taking on a mortgage that is too large for you to handle is one of the reasons you are in such deep debt, it’s time to get rid of it. You should consider selling or renting your home and finding a cheaper living arrangement for now. If you are renting a pricey pad right now you should also be looking to downgrade. Cutting housing costs are the best way to free up a significant chunk of money to throw at debt repayment.
# 2 – Downgrade Your Car
After housing the next biggest expense in your life is most likely your car. If you are driving an expensive car with a high monthly payment or high interest you need to get rid of it – now. You can sell your car and then buy a much cheaper model if there is any profit. You should look for a quality pre-owned vehicle that gets good gas mileage. Freeing yourself from a high monthly car payment will feel amazing!!
# 3 – Sell Your Stuff
One of the biggest reasons that so many people get into debt is for the fact that they like to shop. If you’re a reformed shopaholic and are wanting to rid yourself of debt, selling your stuff may be the answer. Selling your stuff is one of the most effective ways to free up money for debt repayment. Use sites like Gumtree, EBay, Amazon FBA and Craigslist, to sell your items and use the proceeds to pay down your debt.
# 4 – Cancel the Non Essentials
Cable, gym memberships, expensive cell phone plans – all wants, not needs. While you still need to enjoy your life, paying off your debt will require sacrifices. Instead of totally cancelling these non-essentials you can simply spend your money wiser. You can pay $8 a month for TV by using a service such as Netflix, $19/month for unlimited phone service from Republic Wireless, and work out from home. You’ll still be able to enjoy all of the perks of the things your used to only at a much better price.
# 5 – Find a Roommate
Want to instantly cut your rent and utilities in half? Find a roommate. While sharing a space with someone else isn’t always ideal it is a GREAT way to free up extra money. You and a roommate can work out deals to split normal housing costs instantly cutting your budget in half.
Making Drastic Changes to Pay Off Debt
When you’re in drastic situations drastic changes are needed. If you’ve found yourself deep in debt the fastest way to pay it back is by freeing up money. By focusing on large cuts instead of several small budget cuts you’ll be able free up money for debt repayment much, much faster.