Are you struggling with debt? Whether bogged down with debt from a car loan, credit card, or mortgage, you’ll want to explore options to get your head above water.
Consumer debt across the United States added up to $16.5 trillion — yes, that’s “trillion” with a “t” — as of September 2022. The overall debt figure includes student loans, mortgages, auto loans, personal loans, credit card balances, and more. Also, consider that the average American has consumer debt of up to $96,371. That’s enough to depress even the most positive of people.
Do you want to finally slay the debt albatross that is weighing you down? Continue reading to learn more about the best ways to slash your debt load and get the albatross off your neck.
Sell Your Home
If you’re drowning in debt, you might consider selling your home. You’ll want to consider other options, too, of course. Perhaps you can find another way to pay off your consumer debt. But considering that most people’s most valuable asset is their homes, selling yours might be the best move if you’re deeply in debt and want to free yourself from debt in one fell swoop.
If you can sell your home to pay to raise funds, you might be able to kill two birds with one stone by, firstly, paying off your debt and, secondly, buying a less expensive home. If you cannot reenter the home-buying market, you might want to rent for a period. Depending on your goals, renting for a while before buying another home is worthwhile. No homeowner wants to be house poor — owning a home but struggling to make ends meet.
You’ll have options if you can get an attractive cash offer for your home. You can have your cake and eat it too if you decide to spend a good chunk of the sale proceeds to pay off consumer debt and then use the rest to buy or make a downpayment on a more modest home. If you work from home and fancy living in a rural area, you can get a lot for your money by going to the country. Your money will stretch further, and you’ll have more green space to enjoy.
Don’t Add to Your Debt Load
Are you looking to get your debt situation under control? Don’t add to it. One of the worst things you can do is take a step forward and negate that by adding new debt to the pile. Get in the habit of saving up for what you want rather than pulling out a credit card. If you don’t have enough money to pay for what you want with cash, you can’t afford it. You’ll make your goal to reduce debt more difficult if you don’t decide to avoid adding new debt. If that means ripping up your credit cards, so be it. Drastic times sometimes call for extreme measures.
Consolidate Your Debt for a Single Monthly Payment
Another option is to go to a bank and ask for a debt consolidation loan. Getting such a loan will help you pay off all your consumer debt and then focus on paying off the consolidation loan. A single low payment at a reasonable interest rate is better than a bunch of payments at high interest rates. If you do your homework and look around, you can find an affordable rate. Refrain from assuming that all banks or credit unions offer the same rates and loan terms. Some rates and terms are better than others, so it pays to research before choosing a loan and loan provider.
Negotiate With Creditors
Do you have creditors contacting you day and night? Don’t ignore them. One option is to call all of them and try to negotiate repayment plans. Let them know how much you can afford to pay each month. You’ll find that many creditors are receptive if someone takes the initiative to negotiate a way to settle their debts. Creditors might opt to reduce your monthly payments to fit your budget better.
Create a Budget
One way to avoid going further into debt is by creating a budget. Do you already budget? If you don’t know how much you’re spending, you won’t be able to see what issues you might have. You might be spending too much on specific areas. So, if you don’t budget presently, get started. Create a realistic budget you can stick to — and then stick to it no matter what.
People often get into debt because they don’t save enough. You need to start by building a rainy-day fund to have the money you need when there’s an emergency. A good rainy-day fund will have the equivalent of at least six months of salary. If you can eventually build that up to one year of salary, that’s even better. When you have a rainy-day fund, you won’t have to worry if you lose a job, need to replace a furnace, or have to fix a car engine. Besides building a rainy-day fund, you should also have other savings accounts. Saving will make it unnecessary to even consider using a credit card for most purposes.
Doing the above will help you reduce your debt load and move forward free of an albatross. It’s no fun to walk around with a crippling debt load. You’ll never be able to stop thinking about it. But the above suggestions show there are ways to pay off debt. One of the best ways is selling your home.
It would make even more sense if you were thinking about selling anyway. You can sell, pay off debt, rent or buy a cheaper home, and get a load off your mind. And since we offer an easy way for you to sell your home for cash, selling your home has never been easier. Get in touch to get a free cash offer for your home — and take it from there. You’ll see that selling your home doesn’t have to be complicated.