What to Do When You're Free

 A research estimates that every American owes over $7,000 on their credit cards alone, and the average overall debt loan per person is over $15,000. Moreover, every college graduate is already burdened by loans crossing $35,000 when they leave college. Do the stats surprise you?


Most of you owe debt amounts worth thousands of dollar. And every month, you pay an interest over the money borrowed - interest that adds over time. So why not pay off all the debt as quickly as you can? Once debt free, you neither would have to pay any monthly payments nor any interest amount.


Sounds tough? How're you going to pay off your loans? Difficult as it may be, if you're determined, you can take a good a control over your financial situation. We'll share some amazing tips with you that allow you to pay off your debt soon, and then we'll talk about what you should do once you're debt free.


1. Pay more than the minimum amounts


This is a tip that applies to your credit cards, student loans and other personal loans. Considering credit cards, the average balance of any individual is around $15,000 as we already mentioned at the start. If the APR is 15%, it means that the minimum payable amount to the bank is only $625, which you'll be paying back in around 13.5 years. Isn't that too long? Plus, let's not forget, it will take longer for you to pay off the borrowed amount if you continue to use you credit cards for other purchases during this time.


Rather than paying the minimum amount, your monthly payments should be as big as you can possibly afford. This will help you save thousands of dollars in interest and let you pay off your loan much faster. But before you utilize this tip, reach out to your bank and ascertain there are no penalties for prepayments.


2. Try out the snowball method


The snowball method is a popular strategy for paying off your debts, which is again based on paying more than the minimum monthly amount. List down all your debts starting from the smallest one, which is the one you'll be tackling first. Use your excess funds and pay off more than the minimum amount for the smallest debt. For your other larger debts, you would still pay the minimum amount.


Now when you've paid off the smallest debt, you can go onto the next debt on your list and start paying more than the minimum amount for that one. In this way, you can continue to pay off all the debts one by one. As your small balances disappear, you free up more dollars which would allow you to pay off your bigger debts more quickly. The basic goal throughout is to use up all your extra money for the debts, beginning from the smallest one, until you've paid all of them.


3. Try to increase your income streams


How many income sources do you currently have? If you're only doing one job, how about indulging in other part-time businesses or ventures so as to earn more money. Doing so will give you more control over your finances, making it easier for you to become debt free.


Ponder over your strengths and see how can utilize them. Create an account on websites, like Upwork, where you can work as a freelancer in a diverse range of industries. And even if you aren't a technical maestro, it's absolutely okay. You can still babysit someone, mow yards or take on a cashier job at a local store. So earn some extra money and use it for paying off your debts. And once again, do this through the snowball method which we've already discussed.





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