We all dream of leading a debt-free life, but only a few of us actually manage to do so. A study by Northwestern Mutual shows that the average American carries approximately $38,000 in personal debt (excluding mortgage).
In many households, people spend most of their paycheck on debt repayments and are left with next to nothing for savings and investment.
The good news is that it is entirely possible to pay off debt – no matter how insurmountable it might seem to you now. Given below are five creative ways to pay off debt fast and improve your financial situation.
Itemize Your Deductions
If you are not itemizing your deductions, you might be paying more taxes than you need to. The IRS allows you to deduct a wide range of expenses – from medical expenses to mortgage interest.
If your itemized deductions are more than your standard deduction, you should definitely take advantage of it and save some money. Data from the IRS shows that the average tax refund in 2018 was $2,640, which gives you an extra $220 a month, which could be used to pay off debt.
Swap Your Credit Card Debt for a Personal Loan
If you have multiple credit cards and cannot keep up with the repayments, it might be a good idea to get a personal loan to pay off your credit card debt.
If your credit score is above 650, you might be able to get a loan with a lower interest rate compared to your credit cards. By doing so, you can save a lot of money on interest, which you can use to pay off your debts.
Rent out the Extra Space
If you have an extra room, garage, or parking space at your place, you can rent it out and earn some money. You can become an Airbnb host, rent out your spare room, and earn a steady stream of rental income.
There are also several websites where you can sign up as a host and rent out your driveway or garage for people who are in need of parking and storage space.
Save on Shopping
This is one of the most creative ways to pay off debt. Businesses tend to spend a great deal of time, effort, and money to turn first-time buyers and casual buyers into loyal customers.
From special discounts to reward points, cash back offers, and members-only deals, you can find a wide range of offers using which you can save money on groceries, clothes, and essential household items. Make full use of these offers, save as much money as possible, and use it to pay your bills and debts.
Move In With Your Parents
This is an option that you might be hesitant to consider, but it can help you save a lot of money. By moving in with your parents, you can get rid of your rent payments and save a huge chunk of money, which you can put towards debt repayments every month.
Struggling with Debt? Talk to Us
If you are struggling with debt, it might be a good idea to talk to one of our debt repayment experts. By doing so, you can learn how to pay off debt faster. Paying off your debt is easier than you think. Start chatting now to find out how.