The quickest way to pay off your debts
Published Thu, Mar 29, 2012 Updated Tue, Feb 16, 2021
If you want to pay off your debt quickly, here is the best way that a lot of people use to become financially free.
Most people simply make minimum payments on high interest debts for countless years. When the car breaks down, it’s no problem. Just use the credit card and increase the balance. The same thing applies for the dishwasher, the boiler and the TV.
Slowly, this debt creeps up and up and before you know it, you’re overwhelmed by a debt that is hard to pay off. Does this sound like your situation?
How to break the debt cycle
If you want to break this pattern there are a number of ways to do it. Here are some simple ideas that should be obvious but aren’t always to people who are struggling with debt.
If you have debt and are struggling to pay it back, then stop taking out more debt and try to resist temptation. If you have to cut up your cards or recruit a close friend or family member to keep you in check, then do it. Short of a full blown catastrophe that cannot be avoided, you should not take out any more debt.
Consolidate your debt
Instead of paying multiple balances on high interest cards or loans, an option is to consolidate your debts into one monthly payment. This usually secures a much better interest rate and means you will pay off your debt rather than just pay the interest on it.
Cut your pointless spending
Do you really need that £3 Starbucks? Could you live without cable TV? What about the twice-weekly takeaways? By ruthlessly cutting out your spending on unessential items you can free up the cash to overpay your debts. Of course, some spending is necessary for sanity and this method allows a little bit of space in your budget to spend money on items you really want instead of buying things on a whim.
Make more money
Money is the way you’ll pay off your debts quickly, so doesn’t it stand to reason that earning more of it will be beneficial? Look for work in the evenings to supplement your income. Place an advert in the local paper, sell some of your stuff that might be useful to someone else and check out job sites like Upwork for work at home opportunities. You’ll be surprised how easy it is to add £300-400 a month to your bottom line. You could use this entire chunk of money just for debt repayments, while your main income can be used for rent / mortgage, bills and socialising!
Above all else, you need to have the drive and determination to pay off your debts. Be smart, pragmatic and ruthless. Ask for help when you have moments of weakness and enjoy the feeling of paying off huge chunks of your debt quickly.