Multiple debt crises plague the United States despite being classified as one of the most wealth countries in the world. Aside from spiraling student loans, which remain hotly debated to this day, there is also a huge portion of the population who are pushed into financial ruin by medical debt.
According to some sources, over 500,000 Americans are forced to declare bankruptcy every year due to massive debts caused by medical costs. To avoid getting pushed into bankruptcy due to debt, you must reassess your financial situation.
Below are six simply but effective means on how you can save money and get out or even avoid debt entirely.
1. Cut Down on Vacations
Vacations provide people with much-needed respite from their day-to-day activities. However, they also tend to be very expensive, depending on how far you plan on going and how long you are staying. If you need a break but you don’t want to push your finances, you need to cut down on your vacations. Instead of staying at a hotel, check if any Airbnb accommodations nearby are cheaper.
Instead of flying to some distant location, consider going on a road trip instead. Cutting down on vacation expenses can help you maintain fiscal stability without sacrificing your fun.
2. Restructure Finances
Sometimes you need to reconsider your financial situation and need to face the music. Restructuring your finances will require a lot of work and expert assistance. This can begin by assessing your income streams and your monthly costs. Check how much money do you make in a given month and compare it to your outstanding debts and other expenses.
You may also subscribe for services for tax negotiation, which can give you some breathing room to pay your debts. This also covers your mortgages and other financial obligations. Renegotiating or restructuring these expenses can be key to getting better payment options and eventually getting out of debt.
3. Get a Side Gig
As hard as it may be to manage, one of the best ways to make sure you can pay your debts is by opening up new revenue streams. This simply means you need more money and getting money could mean a secondary job. Side gigs are becoming increasingly common, especially with people who have multiple debts.
For example, you can be working a job at a profitable Subway franchise during the day and use your car for ridesharing apps at night. There are all sorts of options available today due to the gig economy. Just be sure you can find one that works with your other obligations and pays reasonably well for the time allotted.
4. Prioritize Payments
Most people have more than one kind of debt or financial obligation. For example, by the time someone is in the late 20s or early 30s, they could have a mortgage for their home, student loan debts, car loans for their vehicles and maybe even taken on some debt from their parents. This means that prioritizing is an essential skill to ensure that the most urgent bills and loans are paid in time.
One of the best ways you can make payments is to organize your bills and loans according to their due dates. This can help you avoid incurring late payment fees and prevent your finances from accruing interest.
5. Try Automation
Electronic payment options are now becoming increasingly common in the United States. Plenty of people can just access their finances or bank accounts on their phones or laptops and confidently make their payments. This also allows them to ensure automatic loan payments.
Automated loan payments may seem scary, but they are extremely helpful when you are too busy to go to the bank or payment center. Automated bills payments ensure that you don’t have to constantly be on edge when the bills arrive. You can continue working a side gig knowing that your loans and bill are paid on time and avoid the penalties of missing these obligations.
6. Continue Saving
It may seem egregious, but its important that you continue to save money while you are paying off all your debts. Although any money you may save could seem small and inconsequential, but they can help you secure your finances later.
For example, a few hundred dollars can slowly snowball into a couple of thousands with smart investment options and strategy. Whether you use this money to pay of debts or set up a business is up to you.
Debt and bankruptcy are serious financial pitfalls. Avoiding them takes work but with the right advice you can ensure your finances are safe and you are cleared of all debt.