Investing money into a large expense, such as opening a business, can seem impossible if you have any sort of debt. Lenders may require your debt to be paid off in order to finance these types of expenses. Fortunately, if you need to finance a large purchase or expense, you can take several steps toward becoming debt-free. Here are five ways to tackle your debt.
Consolidate What You Owe
One of the fastest ways to tackle debt is to consolidate it. By using a personal loan to lower your interest rate on multiple accounts or using debt settlement to negotiate a lower payoff, you can cut the time and payment of the debt down significantly. By doing this, you can create additional available money that you can either save toward your large investment or use to pay off the debt faster.
Start a Side Gig
Getting a second job or freelance work online can generate the extra income you need to address your debt head-on. You could work part-time at a local shop, or look for side gigs online. Several sites will pay you to take surveys, test websites, or even become a mystery shopper with your local department stores and other businesses.
Sell Your Stuff
This may seem kind of obvious, but selling unused items can generate a significant amount of money to invest toward your debt. Sites like eBay and letgo allow you to easily list your unused “junk” for sale. While you probably won’t end up turning a huge profit on these sales, you may be better off selling certain items than letting them collect dust in your basement.
Plan a No-Spend Month
Participating in a month where you don’t spend money on anything but the essentials can allow you to save some extra money that you can put toward paying off debt. The idea of saving money that you already have can seem impossible, but it may not be as hard as you think. Try writing down your essential budget and setting all nonessential money aside in a savings account or other secure location.
Invest Your Change
Some apps and websites allow you to invest with as little as $5. Other companies allow you to connect your bank account to their system so they can automatically round up change from your purchases and deposit that money into a savings account. If you spend $9.43 at the grocery store, for instance, the app will round the purchase up to $10.00 and deposit the additional 57 cents in a dedicated savings account. These small deposits and investments add up quickly, making them one of the most creative ways to pay down your debt.
All of these methods are great ways to pay off debt in anticipation of an upcoming expense. Each method, whether used individually or in combination with the others, will allow people to speed up the process. Additionally, it may be wise to seek help from a finance professional to get the best outcome if you are struggling with your debt or taxes.