How to Get Out & Stay out of Debt

We all know that times have been tough both, financially and mentally, for most people around the world due to recent lay-offs. And although most of our wallets are light nowadays, there are still ways that we can all come out of isolation more financially stable than ever before.

I wanted to take this time to outline some tips and tricks that you can utilize this during this time to redeem yourself financially and come out of isolation on top. 

With that being said, I outlined 5 tips to help you get on track and crush our financial goals if you continue reading.

Ask for Disaster Relief

One thing that most people fail to realize, is that most businesses understand that we are having to stretch ourselves far and thin to pay our larger bills, especially with over 22% of Americans being currently unemployed (A record-breaking number... YIKES). Things like mortgages, student loan payments, auto loans, etc. can all be placed on this amazing thing called a “Disaster Relief Program”. This is crucial because, for the allotted time frame that they agree upon, you incur absolutely no interest (in most instances), and also get relief from having to pay those large monthly payments.

Take advantage of this time, sit on hold until you can get ahold of a customer service representative, and ask if they are currently offering any similar programs. And don’t be afraid to explain your circumstances. Most companies with sympathize with you and are happy to assist.

Pay off credit!

Now, just because you’ve enrolled in disaster relief programs, this is not the time to be blowing all of that extra cash on online shopping yourself back to where we started. This is the time to take all of that extra cash and pay down all of the credit card debt that is sucking your bank account dry. The added interest rates on credit cards are the main factor holding you from achieving your financial goals. For some cards that have interest rates of 20+% and large credit limits, your monthly payments aren’t going to get you very far. 

So, try this… Pay off one card at a time and set a goal for yourself. When do you want to have all of your debt paid off by? Write it down. Then when you finally get to that point, you get to start with a completely clean slate. To keep your credit score high, try to limit yourself to charging less than 30% on each of your credit lines, and if possible, pay off the full balance, monthly.

Not only will you start to have extra cash down the road when you won’t have to pay out so much money in monthly payments to these credit card companies, but you’ll also start to see a nice return on all of your efforts in your credit score. CHA-CHING!

Re-consider all monthly subscriptions.

Ah, I know, the thing you were hoping I wouldn’t include in this list. We couldn’t possibly part ways with our Netflix, could we? 

Well, if you’re honestly someone that would be completely lost without your streaming service, we have bigger issues on our hands than just finances. But, if you do happen to be one of those, I just want to leave you with this one piece of advice:

Some things are holding you back from achieving you from achieving your full potential, and your Netflix subscription is one of them. 

With that out of the way, let’s all ditch the Netflix subscriptions, ditch the Chegg membership that we forgot to cancel after graduating college, and just cut ties with every single one of these subscription services. Not only will this help limit your monthly expenses and provide a little extra cash flow, but it will greatly impact your motivation and allow you to be more productive. 

Take this extra time not spent binge-watching Netflix to read professional growth books or listen to podcasts that will help you reach your goals. Your future self will thank you.

Create a budget.

This doesn’t have to be as scary as it sounds. Budgets can be extremely effective in determining how much money you can have for play, while still paying all of your bills and putting money into savings. Be strategic about it.

You can utilize free budgeting apps like Mint by Intuit or Clarity Money or even just go the old-school route with an excel spreadsheet. Luckily, if you’re not an expert at crafting excel spreadsheets, they do also offer templates on their website that can turn all of the data you input into beautiful charts and graphs that show you exactly how much of your income is spent on expenses.

Practice Self-Discipline

Oooh, yet another cringe-y tip that we hoped we wouldn’t have to hear. And as much as it sucks to admit that you’re going to have to be a little harder on yourself, you’ll start to feel a lot less stressed and more confident once you can master this one simple thing. Luckily, we are in isolation, so there is not really much FOMO that you can be encountering or many plans that you will have to consider turning down. But, whatever you do, stick to your budget!

If that means having to slowly decrease your spending in areas like fast food and shopping each month until you get to your goal, by all means, do so! Take it slow and steady if that’s the method that works for you. I mean, at the end of the day, you know yourself and your spending habits better than anyone else, so you should know what budget is realistic for you. 

Just remember to hold always hold yourself accountable to the goals that you set for yourself.