The amount of Canadian mortgage debt alone surpassed 2 trillion dollars back in 2022, and that’s not even accounting for the many other kinds of debt out there. Getting out of debt fast is a common goal for many people. But, how do you manifest it for yourself? We can help. Let’s go through our top advice to help you achieve that goal with King Cash.
Create a Budget
A budget is essential to help you track your income and expenses. Create a realistic budget that will help you see exactly where you’re spending your money and where you might have room to cut back on expenses.
Make a list of all the income sources you have, including your salary, side hustle income, rental income, and any other sources of income.
Track your expenses for a month to start off. Categorize your expenses into necessary expenses (such as rent, utilities, groceries, and transportation) and discretionary expenses (such as entertainment, dining out, and shopping).
Prioritize your necessary expenses and allocate funds to cover them. Then divert any leftover funds to paying off debt.
Prioritize Your Debt
Make a list of your debts with them ranked, with the highest interest rate at the top going down to the lowest interest rate. Then, you should focus on paying off the debt at the top of the list. This is called the debt avalanche method. But, there are other methods you can try instead.
The first is the debt snowball method. This method involves listing all of your debts from smallest to largest and focusing on paying off the smallest debt first.
Once that debt is paid off, you move on to the next smallest debt and continue until all debts are paid off. This method can be motivating because you get to see progress quickly, but it may not be the most financially efficient approach.
Or you may want to try to combine the two, or the hybrid method. This method combines elements of the debt snowball and debt avalanche methods.
You focus on paying off the smallest debt first to gain momentum, but also prioritize high-interest debt. For example, you may pay off your smallest debt first, then focus on paying off the debt with the highest interest rate, and so on.
No matter which method you choose, it’s important to make consistent payments toward your debts and avoid taking on any new debt. You can also consider strategies such as negotiating lower interest rates or consolidating your debts to make payments more manageable.
Increase Your Income
Think about taking on an extra side job or selling valuable items you no longer need to increase your income. The more money you have, the quicker you’ll be able to pay off your debt.
If you’re employed, consider negotiating a raise or promotion with your employer. This can be done by highlighting your achievements and the value you bring to your company as an employee.
Perhaps your current job doesn’t offer opportunities for advancement or a raise. In that case, consider looking for a higher-paying job that better aligns with your skills and experience.
Starting a side hustle can be an excellent way to bring in a lot of extra income. Think about what your skills are, and look out for opportunities to monetize them. This could include freelance work, selling products online, or providing a service like pet-sitting or house cleaning.
If you have a spare room or residential property sitting around, consider renting it out to earn extra income.
If you have a lot of garbage hanging around, it might be time to get rid of it. Selling unwanted items like clothing, electronics, or furniture can be a quick way to earn some extra cash. Consider using online marketplaces like eBay, Facebook Marketplace, or Craigslist.
Cut Back on Expenses
Look for ways to reduce your expenses. Try and cut back on non-essential expenses such as eating out, entertainment, or shopping.
As you pay off each debt, use the money you were paying towards that debt to pay off the next one. This creates momentum and helps you stay motivated.
Consider a Debt Consolidation Loan
If you have multiple high-interest debts, you should think about consolidating them into one loan with a lower interest rate. This can help you get rid of your debt faster and with less interest.
When you consolidate debt, you take out a new loan to pay off multiple existing debts. The goal is to combine multiple high-interest debts into a single, lower-interest loan. This can make it easier to manage your debt and reduce the total amount of interest you’ll pay over time.
There are two main types of debt consolidation loans you’ll want to look into.
A secured debt consolidation loan requires you to put up collateral. This can result in a lower interest rate, but also carries the risk of losing your collateral if you’re unable to make payments.
An unsecured debt consolidation loan doesn’t require collateral, but typically comes with a higher interest rate.
When considering a debt consolidation loan, you’ll need to do your research and shop around for the best rates and terms. You should also consider any extra fees that come with the loan, such as origination fees or prepayment penalties.
It’s important to note that a debt consolidation loan is not a solution for everyone. If you have a lot of debt or a low credit score, you may not qualify for a favourable interest rate.
Additionally, taking out a debt consolidation loan does not address the root causes of debt, such as overspending or a lack of budgeting.
Before considering a debt consolidation loan, it’s important to create a solid debt repayment plan and make changes to your spending habits to avoid accumulating new debt. A financial advisor can help you determine if debt consolidation is a good option for your specific situation.
Seek Professional Help
If you are overwhelmed with debt and are struggling to make ends meet, consider seeking the help of a financial advisor or a credit counsellor. They can help you create a plan to get out of debt and manage your finances more effectively.
King Cash is one of the best options for getting out of your debt situation. We can help you get a cash-approval loan in no time.
Start Working With King Cash Today
Remember, getting out of debt takes time, patience, and commitment. Stick to your plan and stay focused on your goal of becoming debt-free.
Do you need a cash loan to get out of your situation? Claim your cash loan from King Cash today.