Hacking Your Debt: How to Live a Financially Stable Life

February 14, 2020

Living under a sea of debt can be frustrating and daunting, and it’s a lot more common than you might think. Unfortunately, the vast majority of families how some form of debt, as well as working individuals. If you’re tired of living from one paycheck to another and are ready for a change, it’s time to hack your debt and get away from living in a financially unstable state. These tips can help you to improve your quality of life while getting rid of mounting debt.

Consolidation

Consolidation means taking all of your debts and putting them either onto one loan or credit card. This allows you to make one single payment a month rather than four or more. A lot of times, credit cards as well as some loans can have high interest rates. In an attempt to get rid of these hefty fees, consolidation can get rid of them entirely so that you only have one account to deal with on a monthly basis. Before consolidating, it’s important to know how much you owe and the best way to go about lumping everything together, whether this be with a personal loan or a low-interest credit card. See also, the negotiating a collection debt.

Refinancing

Refinancing is a wonderful way to save money. The way that this works is by taking your debts and both extending the time you have to pay them as well as lowering the interest rate. By doing so, your monthly payments are far less than you’ve had to shell out, saving you money long-term. Refinancing with Earnest is an especially beneficial step for individuals who have student loans and who are tired of paying a fortune each month just to stay on top of things.

Budgeting

It is essential to budget your income so that you have enough for both essentials as well as bills. Budgeting doesn’t have to mean that you need to give up everything you love in life. It simply means making changes to how you spend and avoiding impulse shopping at all costs. Take your income to debt ratio each month and see how much you’re left with once everything has been paid. If you owe more than what you make, it’s time to consider either refinancing or consolidation.

Saving

For individuals who struggle with debt, the last thing on their mind is to save money. However, putting some cash aside into a savings account is one of the best ways to avoid more debt on top of what you already have. You can automate your savings each week by setting up transfers with your bank. The bank takes the money out of a checking account for you and then deposits it into your savings.

Planning

You have to plan for the future so that you’re financially secure and stable later on as well as today. If you’re living from one paycheck to the next, it can be difficult to plan for the future. However, by putting some cash aside into a retirement fund as well as an emergency account, you’ll be able to avoid more financial problems later on. It is never too early to start thinking about retirement.