8 Reasons You Should Get out of Debt Right Now!

Debt is something that all of us have dealt with at least once in our life. Whether it’s college tuition, car loans, mortgage, or something else, we’ve all been in debt before. While debt is a part of life, it’s not one that has to stick with us forever. Here are eight great reasons why to get out of debt as soon as possible.

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When you’re in debt, all of your other financial investments are less impactful. Even if you’re making good money off of stocks, some (or maybe even all) of that money is going towards paying off your debts. When you get out of debt, any extra money you make on your investments goes straight to you.

Debt is stressful. The more you have and the longer you have it, the more stressed you’ll become. Managing debt for a few years may be manageable, but it can really affect your health and stress-levels if it becomes a life-long burden.

When you’re in debt, you’re not working for yourself. You’re not working for your own vacations, home improvements, or anything else. Instead, you’re working to pay your debtors; they’re making all the money off your hard work! Getting out of debt will make you feel great because you’re only working for yourself!

8 Reasons You Should Get out of Debt Right Now!4

When you get out of debt, you’ll be a lot more stable—financially as well as in other areas of your life. Any unforeseen accidents or problems won’t cause you to stumble and fall financially like they would if you had debts to worry about.

Believe it or not, your familial relationships will improve (especially with your spouse) when you don’t have debts to worry about. Most arguments in the family are caused (or somehow affected) by money; so when you have more money coming in and less money going out, it’ll make things at home better.

Once you manage to get out of debt, your credit score will steadily improve. And, when your credit score is better, every other area of your financial life improves, too! Interest rates are lower and you’re array of financial options increases.

Prepare for the future by getting out of debt now. Once you don’t have any more money going towards debts, you can start putting money in a retirement plan, your children’s college funds, or other things. By getting out of debt today, your future will be much better.

One of the best reasons for getting out of debt is that it gives you control over your life! You won’t be subject to interest rates, late fees, loan sharks, angry bankers, etc. When you’re free from debt, you’ll feel so much more free an in control of your life.

How to Pay off Debt with a Debt Snowball

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The debt snowball method is very motivating because you will start to see results quickly! To get started, organize all of your debts from the lowest balance you have to the highest balance, regardless of the interest rate they have.

Then, pay your minimum payments on each of your debts, but pay as much extra as you possible can on the lowest balance debt.  You will have to work hard to put the most money you can toward this expense until it’s gone. Don’t try to pay a little bit of extra money toward the other ones. If you have the extra money, send it all to the lowest debt on your list.

Once the first debt on your list is completely paid off, you’ll feel great. It is very motivating and seeing that debt disappear is very exciting.  Now, take the payment plus the extra amount that you were used to paying on the small debt and apply it to the next smallest debt.  You will end up with even more money at this point to send to the next debt item on your list because you will no longer owe money toward the debt you just paid off.

As you start paying off debts, you will be able to save more and more money to apply to your next debt. The amount of money you have will grow and grow (like a snowball) until you eventually reach a debt avalanche.

The debt snowball method works and will bring fast results! Not only will you have your debts paid off quickly, you will feel great doing it.

For other great ideas on getting out of debt, see these related articles:

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How to Budget when You Don’t Make Enough Money

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Learn to Cut Back

Make a list of the money you have flowing out into different expenses. If you have cable, or streaming networks you pay for, such as Netflix or Hulu, put those on your list next to how much money it costs you each month. If you have smartphones in your family write those down as well. List magazine subscriptions, gym passes, art classes, or anything that comes to you as a regular expense. Then you need to look at your list and decide how to cut back. Maybe you can just eliminate a few things, or maybe you need to cut it all out for a little while until your bank account becomes more stable. There is no point in paying for a huge cable bill, or random magazine subscriptions that you never read, while you’re struggling to make ends meet. The more you cut the better off you will be.

Get into Survival Mode

Don’t spend money on things you don’t need. You have to get into a survival mode and focus only on the essentials. Avoid eating out, shopping sprees, going out to movies or events, or anything that is unnecessary. If you can control your spending habits and you can cut back on these things, you will be amazed how much money you save. It doesn’t mean you can’t have fun though. Start making a fun meal plan with ingredients you already have at home, look online for free date ideas that can still get you out of the house, and find ways to mix and match pieces in your closet to wear them in ways you never have before. Overall, just make sure you are only spending money on the things you have to have to survive.

Make More Money

To help you feel more fluid in your budget, you’ll need to find ways to make more money so that you can attack your financial situation from both ends. There are a lot of ways to make money from home on the side.  You can pick up extra shifts at work, or get resourceful and see if any of these 50 Ways to Make Money on the Side are good options for you.  If you don’t have a job that pays well enough and you are having hard time getting ahead, consider finding a new job, improving your skills or even getting educated in a new trade or field to improve your quality of life.

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Prioritize Your Bills

If you have a lot of bills to pay, make sure you decide which ones have to be paid off first. Hopefully you cut back on everything from the list you made, but now it is time to sort through what important bills are MOST important. Take care of things like your house payments and energy bills first and then keep moving down through the things that are most important for you to keep surviving and having your basic needs met.

Keep a Positive Mindset

Overall, remember to stay positive. Of course this is easier said than done, but it is so important when trying to get out of a financial bind and start to plan effectively. Negative thoughts are destructive and won’t help you moving forward. Try to think each day about good things that happen to you, opportunities that come your way, connections you have with other people that could help, and really anything that keeps you positive and focused on your ultimate financial goals. If you can’t master a positive mindset, you other strategies could fall apart.