How to Reduce Debt to Reduce Stress

Many people are in debt because of student loans, being out of a job or making a bad business deal. Debt can cause a lot of stress, making it difficult to sleep or function properly in daily life. When figuring out how to get out of debt, sometimes it can feel like an uphill climb. Reducing debt is possible if you are willing to work hard and take positive steps towards debt freedom.

Instructions

1

Obtain lower interest rates. If you have paid your credit cards on time consistently, you can call the credit card company and it may lower your interest rate. If the credit card company will not do this, apply for a 0% APR credit card and move the balance to this card. You can also ask for lower interest rates on your student loans if you have been consistent in payments.

2

Make a budget. Use your budget to cut costs. If your food bill used to be $200 per month, make it $150 per month and use coupons. Use the extra money to pay down debt.

3

Build an emergency fund. Make sure this emergency fund covers two weeks of bill payments. This way if there is an emergency, you will not need to turn to more debt to help pay for it.

4

Increase your income. Get a part-time job. Sell items online. Have a garage sale. Use all of the money you make to pay your debt off.

5

Sell your car. If you are still making payments on a vehicle, you can sell it to reduce debt. Once you sell it, buy yourself a cheaper car and use the rest to pay down your debts. Once you are out of debt, you will be able to pay cash for a better car.

6

Get credit counseling. A good credit counseling agency will help you with financial planning. Do not pay an upfront fee for credit counseling as some of these places are scams. A credit counseling agency should help you with a budget and ways to pay down your credit cards without an agreement or payment.