Getting Out of Debt in 2016

Is it possible to be debt-free? This is a question asked by many Canadians as they get older, get married, have kids, get sick, or purchase a place of their own. This may seem unreal to some, however, it is real and possible, only if you make smart financial decisions.

Pay More than the Minimum

It is tempting to pay just the minimum of your outstanding debts. However, one of the fastest and best ways to get out of debt in 2016 is to pay more than that. With the minimum, you might just be paying off interest and not the principal amount. It might take you years to pay off that loan or credit card. If you can, make it a point to pay beyond the requirement.

Spend Less

This is a common sense thing to do for people who want to get out of debt. Spend significantly less than you make to pay off debts faster. Many get into and stay in debt because they keep buying or spending on things they do not need with money they do not have. A credit card is both a good and bad thing to have, because it allows you to pay for things without dipping into your savings. However, it can be bad because you feel that you have an endless account where you can spend whenever you want.

Get Rid of Expensive Debts First

One way to pay off debt is to pay the biggest one first and pay the minimum amount for the rest. This enables you to breathe easy and gradually become financially flexible as you slowly pay off all of your debts. Seeing your progress will keep you confident in becoming debt-free in 2016.

Get a Second Job

For those who want to pay off debt quickly, getting a second job or working overtime or extra shifts gives them the extra money they need. Concentrate all the money you make to debt repayment. This aggressive method might not be for everyone, but it is effective. As soon as you pay off debt, start scaling back and relax.

Get a Consolidation Loan

A consolidated loan turns several payments into one at a lower interest rate. This is an ideal first step to get out of debt and monitor where your money is going.

Payday Loans

Payday loans provide quick financial relief until your next paycheque. This gives you time and extra money to pay off outstanding credit and still have enough to pay for necessities.

These steps are a rough guide to help you get out of debt in 2016. Start paying off debt as early as you can to be financially stable before you retire.