No matter who you are, there's a good chance that you have some debt in your life. From credit cards to personal loans, from car loans to your mortgage, there is debt that you think about often.
Although you have the opportunity to pay down your debt over time, you don't want it to linger for too long. Here are some tips you can follow to become debt free as quickly as possible:
- List debts by interest rate: With this approach, you can tackle the debts that are costing you the most money first.
- Save for a future emergency: An emergency fund is a must, as this ensures that you have money in the bank should an unexpected expense move to the forefront.
- Create a budget: With a budget in hand, you know how much you're earning and how much you're spending. This will allow you to adjust your financial approach accordingly.
- Consider a balance transfer: Can you transfer high interest credit card debt onto a card with a zero percent introductory rate?
If you find yourself swimming in more debt than you can handle, bankruptcy is always an option. This is a big step in your financial life, but it may be the one that puts you in a better place in the near future.
With Chapter 7 bankruptcy, for example, you can discharge some or all of your debt within a few months of filing. There are both pros and cons of bankruptcy, so make sure you consider all the finer details before making a final decision.
Source: Clark, "10 tips to become debt-free as quickly as possible," accessed May 11, 2018