How to get out of DEBT Fast | 8 ways to become debt free

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Here is how to get out of debt fast and become completely debt free! With some fundamental changes to your lifestyle, and dedication you can get out of debt fast.

Debt Solution 1 - Understanding the importance of becoming debt-free.
The importance of becoming debt-free includes things like less stress, more financial freedom, and various other reasons depending on each individual. This is where you need to find your personal reasons why it's important to become debt-free. Start by writing these reasons down, put them someplace you can see them every day, and review them when you need a boost of motivation. This is to help you stay on track!

Debt Solution 2 - Understanding your debt.
Know the difference between good debt and bad debt. A mortgage or a student loan are usually good examples of debt. Good debt is when it benefits your financial future in any way. Now for the part that you may not want to talk about, bad debt. It's surprising how many people don't pay attention to the debt they carry. The first thing you should do is list every one of your bad debts on a piece of paper and write down any relevant details such as interest rate, minimum payments, and terms. That will give you more clarity on your total debt load, only then can you create a plan to erase it.

Debt Solution 3 - Commitment to budgeting
Clarity and organization of your finances are key in this next step to breaking down your debt and creating a healthy financial routine. You have to separate wants and needs, to organize and budget accordingly. There are lots of different budget strategies like the 50-30-20 or 70-20-10 rule where you put so much aside for your bills, rent or mortgage, and things that have to be paid. These budgeting solutions help you allocate your monthly spending into areas that will help you focus on your financial goals.

Debt Solution 4 - Spending 
If you truly want to relieve your debt, you have to make some sacrifices. Removing any bills that are "wants" rather than "needs", is a good place to start. Things like Netflix, dining out, or therapy shopping are all things you should remove if you want to take control of your spending. If you're serious about becoming debt-free, you have to cut out these types of frivolous spending. While it's not easy to sacrifice some of these luxuries, the good part is that this isn't forever.

Debt Solution 5 - The avalanche method and the snowball method
Both methods require you to pay the minimum payment on all debts but differ on what order you pay these debts off. In the snowball method, the key to this strategy is to target your smallest debt first. Because it is the smallest debt, you're going to be able to pay it off quicker. Once you have that done, you add that payment to the next smallest debt on the list. Next up,  the avalanche method. In this case, you will want to repay your debts starting with the highest interest rate. It may take longer to see initial results but this method is mathematically the fastest way to pay off your debt.

Debt Solution 6 - Consolidation Loan
Combine multiple debts under one payment. The effectiveness of this tactic is completely reliant on your ability to control your spending. Most people that use consolidation loans do not change their spending habits and continue to dig themselves deeper into debt. While this downside ties into the psychology of financial responsibility, consolidation loans may still be a good option if you can lower your overall debt by reducing your interest rate. If you can control your spending this is a great option.

Debt Solution 7 - Money Saving Challenges
Try a money saving challenge like the 5 dollar challenge, where you save $5 the first week and increase it by $5 every week after for a year. It can get pretty expensive by the end, so some people use slight modifications. If you do manage to complete it, you can save over $7000 in a year!

Debt Solution 8 - Earning extra income.
We suggest picking up a side hustle to earn extra money. This can be anything from flipping couches or garage sale flipping. It doesn't really matter what side hustle you choose, if you have spare time then you can make spare money. If a side hustle isn't for you, try to get more hours out of your current job. At the end of the day, the more money you make, the quicker you can clear your debt!

Timestamps 
0:00 Get out of debt Intro
1:28 Debt Solution 1
2:22 Debt Solution 2
3:45 Debt Solution 3
5:35 Debt Solution 4
6:48 Debt Solution 5
8:30 Debt Solution 6
9:07 Debt Solution 7
9:53 Debt Solution 8

DISCLAIMER: Any information provided on this Channel is intending for entertainment purposes only and does not constitute any financial, legal, tax, investment, or other advice. Always consult with a financial professional before making any investments or financial decisions.

#debt #finance #investing

YouTube url:	https://www.youtube.com/watch?v=-3zR_Rkgk4k
Created:	5. 8. 2021 22:17:21

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How to get out of DEBT Fast | 8 ways to become debt free