Becoming free of debt is about more than just paying down balances. You quickly realize that this is a slow burn way of becoming debt free, and especially if you have a large debt like a mortgage, you might be lucky to be debt-free by the time you reach retirement age. Many of us want more for our lives than that! If you’re looking for some outside the box ideas for having a debt-free life, here are some ideas to help.
The latest research about debt doesn’t paint a pretty picture for Americans. The average American carries a significant amount of debt, split between credit cards, student loans, auto loans, and mortgages. So when it comes to actual numbers, what is the total amount of debt Americans tend to have? Well, on average, it’s $90,000 per person. The most debt is held by Gen X, who are people aged between 40 and 55. Get X-ers have an average of $135,841 of debt each. When people get to the age of 75 or over, the amount of debt they have drops to around $40,000 each. That’s still a lot! Most of us would have hoped to be debt free by this age, right?
Debt is clearly a challenge many of us face, as we try to balance life’s necessities and pleasures without tipping the scale too much towards financial strain. But if you want to get rid of your debts, it’s important to think of this as being attainable. It might just take a bit of a creative mindset. Here are seven ways you could help yourself become debt free.
1. Sell Your House
Selling your home might seem like a crazy thing to do. Where will you live? Why would you give up a home you’ve probably worked hard to secure, maintain and run? But given the fact a mortgage is the biggest source of debt for most people, this is a good way to become debt free. Perhaps you could find a smaller and cheaper home that still meets your needs, and you could buy it with the equity you’ve built up in your house. Or maybe you’re willing to be flexible on the location of your home, if it means cheaper living and no mortgage? If this sounds like an option for you, it’s even possible to sell my house fast for cash and get on with your life!
2. Pick Up A Side Hustle
The average American has a full-time job, but if you’re also able to do something on the side that brings in extra money, this could go towards paying off your debts without it feeling like such a struggle. A side hustle is basically any activity or job done outside of your main occupation, and there are plenty out there that you could try. Think about your skills, talents, hobbies and interests. Could you tutor kids after school? Teach online courses? Do some freelance work? Deliver food or groceries in the evenings or on weekends? The possibilities are endless. And you can probably find something that you quite like doing, or in the least, don’t mind doing.
3. Be Clever With Credit Card Balance Transfers
Many credit card companies offer balance transfers with low interest rates for a certain period of time. This is especially useful if you have a large balance on a high-interest rate card. By transferring this balance to a card with low interest rates, you can save yourself hundreds or even thousands of dollars in interest payments over time. Just make sure to read the terms and conditions carefully, as there may be fees associated with the transfer that could outweigh the benefits.
4. Budget Creatively
It’s no secret that budgeting is a key component of debt-free living. But instead of just cutting your expenses and sticking to a strict budget, consider getting creative with how you manage your money. For example, try using cash envelopes for certain spending categories instead of relying on credit or debit cards. Or, find ways to make extra money through selling items you no longer need or offering services to others. Think outside the box and you may be surprised by how much money you can save and earn.
5. Look For Alternative Forms of Income
In addition to a side hustle, there are other ways to generate alternative forms of income that can help pay off your debts faster. This could include investing in stocks or real estate, renting out a spare room on Airbnb, or even starting your own business. The key is to find something that matches your skills and interests, and can bring in a steady stream of income.
6. Downsize Your Lifestyle
Sometimes, the biggest challenge in becoming debt-free is letting go of our luxurious lifestyle habits. But if you’re serious about getting out of debt, downsizing your lifestyle can make a big difference. This could mean moving to a smaller home, giving up expensive subscriptions and memberships, cutting back on eating out or buying luxury items. High end gyms and health clubs are the downfall of many. If you have a gym membership, look at how often you go, and work out the cost per visit. And if you’re shocked by the answer, it’s time to cancel it! Remember, this is only temporary until you become debt-free, and then you can start to slowly add back in some of these luxuries.
7. Seek Professional Help
If you’re struggling with debt and feel like it’s an impossible task to become debt-free, don’t be afraid to seek professional help. A financial advisor or credit counselor can work with you to create a personalized plan for paying off your debts and improving your overall financial situation. They can also provide valuable advice on managing money and avoiding debt in the future.
Becoming debt-free is actually achievable! It just takes a bit of creative thinking and determination. By using some of these strategies, you can start taking steps towards living a debt-free life and achieving financial freedom. It’s never too late to start working towards a better financial future – if you think you’re in a debt trap, just start somewhere and see what progress you can make.
