How do I pay off debt if I live paycheck to paycheck?
Find out how to achieve financial freedom and why you should take the first step today!
Along with a beach house and a sports car, financial freedom is something most adults dream of. However, taking the first step and really committing to changing your financial situation when you’re in a lot of debt can be the hardest part. According to this NerdWallet article on how to get out of debt, having the right tools and the right motivation are some of the key steps to find success in the process.
So is living debt free a dream that seems impossible for you to achieve? Here are some of the main reasons why people find themselves challenged to achieve financial freedom and how to overcome them.
“I Don’t Make Enough Money”
Sometimes getting out of debt seems impossible when you’re making only minimum monthly payments. This is mostly true for people who believe they don’t make enough money to pay more. A good solution to this is considering debt consolidation.
When you consolidate debt it is easier to focus all your attention into just one payment, instead of feeling helpless with multiple monthly payments and stacks of bills on your coffee table that you can’t even keep track of. In many cases, consolidating debt also reduces your interest rates and monthly payments, making it easier for you to pay more than the minimum payment and getting you one step closer to financial freedom. Click here to learn more about debt consolidation.
“I’m In Too Much Debt”
If you feel like you are drowning in debt, you are not alone. The average American has an average of $38,000 in personal debt, and the average household carries $137,063 in debt. Compared to other countries, the United States has the 10th most indebted households, followed by Portugal, Thailand, Finland, and Spain. So what’s the best solution when you’re in this position?
According to this Credit.com checklist, sticking to a strategy, consolidating debt, adjusting your budget, and monitoring your credit report regularly could make a huge difference!
“I Have Too Many Expenses”
Having too many expenses is a similar situation to being in too much debt. What you would be surprised to learn, however, is that most Americans are overpaying for things without knowing!
NerdWallet.com explains that simple actions like getting a roommate, switching cell phone carriers, taking advantage of public transportation or exploring lower interest rate options on credit cards could make a big difference. The catch? You must put this extra money you’re saving towards existing debt instead of using it for unnecessary purchases … as tempting as a new pair of shoes might sound!
“Something Unexpected Happened”
Another situation that usually prevents people from achieving financial freedom is going through an unfortunate unexpected event that takes a toll on their savings. If you find yourself struggling to move ahead because you’ve had an unexpected medical issue, a car accident, or have been involved in a legal matter such as divorce, it’s always recommended to find a professional that can advise you on what actions to take. Many times, there are forms of financial aid or personal loans that can help you by paying for an unexpected situation without having to get in debt.
“How can I get started today?”
When living debt free, all your income goes towards recurring expenses and saving for your future. Whether you’re putting money towards your 401(k), your kids’ college fund or simply saving to have a better quality of life down the road, saving for your future is so much easier when your money is not going towards minimum payments and interests!
LendingPoint is a personal loan provider specializing in NearPrime consumers. Typically, NearPrime consumers are people with credit scores in the 600s. If this is you, we’d love to talk to you about how we might be able to help you meet your financial goals. We offer loans from $2,000 to $25,000, all with fixed payments and simple interest.