Debt repayment is something no one really wants to think about. But, it's something that a lot of us need to plan for. What's been some of the best strategies that work for you? Especially for someone who has a lot of time, but not a lot of money to get it done?
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Great topic question, I will bite:
As you go down the rabbit hole of researching the topic of 'Getting Out of Debt' you will surely find that there are a few approaches to consider yet, the conclusion will be that the path chosen is simple to understand but very hard to stick to.
My recommended approach to tackling debt while not having enough means (low income) are as follows.
1. Know Your Numbers: You have to know how much money is coming in and how much money is going out. Have a record of your income and expenses on paper (or digitally if you are tech savvy) and record and review it every paycheck cycle and every month. Find ways to reduce any unnecessary expenses and use that to pay of debt.
2. Sell What You Don't Need: If you don't use it, sell it and you can increase your income (at least for the short term). Either way it's extra cash on hand which will be used to tackle that debt.
3. Find a Way to Increase Your Income: Get a second job, Do some 1-time side gigs. Use all the money (100%) of your earnings to pay down debt.
4. Call Every Debtor: Now that you have an action plan, call every Credit Card company and ask them to lower your APR, - Pay down lowest CC first and call all utilities companies (gas, electric, water, waste management) see if there is a payment plan that you can work out where your payment is sale every month for at least a year. Call your internet provider and ask them to lower your bill. You will be surprised on what they are willing to do to keep your business. Call your cable company too (or disconnect it) It may be more cost effective to have 1 or 2 subscriptions (Netflix, Hulu, Disney + etc) than a $100+ cable bill.
It is my belief that the plan layed out above will be an express lane to getting out of debt. Keep in mind there will be other variables to consider, but I just wanted to lay down an easy plan so it could serve as a motivation for those who may feel burden by debt. I personally know this burden will take it's tool on your emotions and affect your daily life drastically. So, it [IS] worth fighting to get our of debt. You know it - Now go do it!
Let's say you have 2 debts: A $2,000 car loan at 6% and an $11,000 credit card debt at 18%. While continuing to maintain minimum monthly payments on both, it makes mathematical sense to use any extra cash and apply this to the credit card debt since it has the higher interest rate. However, psychologically, it has been found to be easier if you apply any extra cash towards paying down the car loan since the balance is lower and you will see it paid off much sooner than the credit card debt. Once it is completely paid off you will feel good at having achieved one of your goals and encouraged to continue your journey of becoming debt free. You will then add the monthly payment amount you had used for the car loan and combine this with your credit card monthly payment, thus paying down the credit card balance at a much faster rate. Any extra cash you have will also be applied to pay down the credit card debt, with the result you will arrive at the finish line much more quickly than you realized.
Once both debts are completely paid off, keep making the same payments to yourself by creating an emergency fund, say of $1000-$2000. Resist the urge to spend this, and instead know that this will cover you for any possible emergencies that life may throw at you down the road. This will also help prevent you from going back into debt again.
Get roommates. Move back in with your parents. Do anything short term to cut your costs so you can kill that debt faster.
A power move by @vodster above. Lowering your expenses and using all your excess funds will result in a real quick way to reduce debt super fast. If you want to double down lower your expenses and simultaneously raise your income. You will be so happy you sacrificed for the short term.
There's an old saying that is always painfully true: it's not often about the income but always about the outgo!
Be very familiar with every cent you spend. If you are living as frugal as possible your success is assured.
Above all, the simplest way to feel accomplished, along with what @Knightlight said, is to pay yourself something FIRST! No matter the amount, put something aside just to tell your brain that you have it.
SGLeavitt357's mention about paying yourself first is a good tip. I would recommend reading the book "The Richest Man in Babylon" as it goes into this and more. It is not too long of a book, but if you don't have time to read it you can see the themes summarized in Wikipedia.
One of the themes involves how to cure a lean purse. The first cure is titled: Start thy purse to fattening.
Arkad advises on saving 10% of your annual income to start building up your wealth (or purse): "For every ten coins thou placest within thy purse take out for use but nine. Thy purse will start to fatten at once and its increasing weight will feel good in thy hand and bring satisfaction to thy soul"
I have heard finance gurus in recent years suggest upping the saving to 15% once you are comfortable, though aiming for 10% is great when you are just getting started.