The average American household carries about $82,000 in debt, and the average Canadian household owes approximately $41,500, and this does not include mortgages. In fact, household debt in the country reached $16.5T in 2021. Many of these individuals wish to reduce or eliminate their debt but aren’t sure how to go about doing so. With the help of a debt relief Canada program (or a relevant service in the US), getting out of debt doesn’t have to be difficult. However, a person needs to know how to get out of debt and stay that way. The following tips will help in achieving this goal.

Pay More Than the Minimum Due

Whenever possible, pay more than the minimum on existing debt. Doing so helps to decrease the amount of interest paid over the life of the debt. In addition, the debt will be paid off sooner, which is a wonderful feeling.

Use a debt calculator to determine how quickly debt can be paid off. Most calculators require the user to enter the amount owed, the current interest rate, and the desired payoff date. Some calculators allow the user to enter this information for all debts to obtain a final payoff date.

Establish a Plan

When paying off debt, have a plan in place to do so. There are many existing plans a person can use, or they can create their own. It’s what works for an individual and what provides them with the motivation needed to continue moving forward.

Two popular methods are the debt avalanche and debt snowball techniques. With the debt avalanche, a person chooses the debt with the highest interest and puts money toward that debt each month. As one is paid off, they begin working on the next.

The debt snowball method works in a similar manner. However, the debtor pays the bill from the smallest amount owed to the largest. This allows them to see progress more rapidly. Often times getting out of debt comes with a lot of mental and emotional challenges and progress can often provide the motivation needed to continue the course!

Sell Some Belongings

People have items in their homes they never use. These items sit there collecting dust. Look around the house and see what can be sold to help pay off debt faster. Many people are surprised to see how much they can get rid of and never miss. In 2022 it’s super easy to sell these items with plenty of online sites or even Facebook Marketplace making it quick and easy. Use any money collected from the sales to pay off debt.

Request a Lower Interest Rate

Contact creditors and request a lower interest rate. It never hurts to ask, and a creditor might say yes. A creditor is more likely to do so when a person has been on time with all of their payments. A lower interest rate will allow the debt to be paid off sooner. Remember that your lender doesn’t want you defaulting on the loan which means they lose some of their money, so it’s not outrageous to negotiate!

Take a Part-Time Job

Look around for a part-time job or side hustle. Doing so can be challenging with work and family commitments, but any extra money coming in will help. Consider offering a parents’ night out, for example. Offer babysitting services one Saturday night a month and make it fun for the kids being watched and the family. Use the money collected from babysitting to pay off the debt.

TLDR (Too Long, Didn’t Read)

With most households owing debt today, steps must be taken to bring this debt under control. Doing so may seem impossible, but it isn’t. Use the above methods to begin paying off debt and seek help from a debt relief provider if needed. A person can live a debt-free life if they take steps to make this happen. Start today for a better financial future!

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