To get out of debt faster, try reworking your cash flow. You have two key ways to boost your debt payoff: Cut your expenses or increase your income.
First, use this calculator to help you get a handle on your minimum monthly obligations and see how much extra cash you can put toward becoming debt-free.
Then dive into your budget and cut out expenses — big and small — to free up more of your money for debt payoff. And look at new ways to scrape together some cash to boost the income you have to put toward your debt.
What’s left over after you pay the bills?
No matter where you are in the cash flow pipeline — just breaking even or not having much extra money to put toward your debt — try these tactics to boost your debt payoff:
- Get a grip on your budget. Consider tapping free budgeting help from a nonprofit credit counselor, who can help you comb through your finances. Everything from haircuts to housing will be tallied to help you find ways to cut expenses.
- Build an emergency fund. It might seem hard to find extra cash on top of paying off your debt, but it’s worth the effort. Even a small emergency fund of $500 can soften the blow of a financial shock and keep you from getting deeper into debt.
- Boost your earnings. Taking on a side hustle or selling your old stuff online can bring in extra income to put toward debt.
- Save more money. Every dollar counts, really. Cutting down expenses, such as dining out or buying clothes, can add up fast. Consider setting goals for daily, monthly and long-term savings.
- Pump up your credit. Find out your current credit score and determine what you can achieve with better credit. With a higher score, you may save money on things like car insurance. And you might qualify for some tools to help you consolidate debt at a lower interest rate, such as a balance-transfer credit card or personal loan. The less you have to pay in interest, the higher the portion of your payment that can go to reducing the underlying debt.