Getting out of debt is not easy for anyone, it really is a feat when you have little money. If you want to pay your debts but you don’t have liquidity, you should start by making some financial changes. But don’t worry, stay with us and continue reading, here we will tell you how to pay debts without money
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- 1 How to pay debts without money? 10 ways to do it
- 1.1 1. Create a budget
- 1.2 2. Distinguish between what it means to be broke and what it is to overspend
- 1.3 3. Prepare a plan
- 1.4 4. Stop creating debt
- 1.5 5. Look for ways to reduce your expenses
- 1.6 6. Increase your income
- 1.7 7. Ask your creditors for a lower interest rate
- 1.8 8. Pay on time and avoid commissions
- 1.9 9. Consider consumer credit counseling
- 1.10 10. How to pay debts without money little by little
How to pay debts without money? 10 ways to do it
We know that you have financial commitments and you want to meet them. For this reason, we have created a list with 10 tips so that you can do it as soon as possible.
1. Create a budget
A budget will help you make better decisions about your money and give you an idea of how much you can spend on your debt each month. Don’t try to manage your expenses mentally; seeing the numbers on paper allows you to understand the big picture without relying on your memory. Your budget can also help you decide where you could save money to pay off your debt.
2. Distinguish between what it means to be broke and what it is to overspend
Do you use the term “broke” to describe your situation after you’ve spent all your money on non-essential expenses? If so, you’re not really broke. You can make some changes in the way you spend to achieve some savings in your budget. However, if you’re really broke, don’t make it worse by making poor decisions, like spending on things you don’t need, for example.
3. Prepare a plan
Paying off debt should always start with a plan, no matter how much money you have, and even if you can’t start paying off your debt right away. Start by making a list of your debts along with the balance and interest rate. Prioritize your accounts, noting the order in which you want to cancel them. For example, debt with the highest interest rate first, lowest balance first, or another order. A good way to do this is to pay as much as you can on one account and pay the minimum on all others. Ideally, you’ll find ways to free up more money from your budget, but work with what you’ve got to start with.
4. Stop creating debt
5. Look for ways to reduce your expenses
Don’t play guessing games. Review your monthly bank statements to see where you spend money each month. For every purchase, seriously ask yourself if it’s an expense you can do without. Remember, you’re not cutting expenses just to distract yourself. You’re doing it so you can get out of debt. It is an important goal. You may have to make some temporary sacrifices, but you can add expenses back after you’re debt-free if you decide they’re worth it.
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6. Increase your income
By generating more money you will achieve two objectives. First, you no longer have to rely on your credit cards to make ends meet. Second, you will have more money available to spend on your debts. You can increase your income by taking a second job, doing freelance work, selling things on eBay or Craigslist, earning money with a hobby, doing odd jobs, or starting a small business.
7. Ask your creditors for a lower interest rate
A high interest rate makes it difficult to pay off debt because most of the monthly payment goes toward interest. Lowering your interest rate lowers the monthly interest you pay and allows you to pay off your debt faster. A good credit score and a positive payment history is an excellent support to obtain a lower interest rate. If your credit card issuer doesn’t change its mind, consider transferring your balance to a credit card with a more favorable interest rate. Taking advantage of a 0% balance transfer offer is even better.
8. Pay on time and avoid commissions
Late payments are a drag on the progress of debt settlement. Unfortunately, you will have to double the payments the following month and pay a penalty. If not, you could use that money to reduce your balance. Also, two late credit card payments in a row carry a penalty fee, which will also make it harder to pay off your debt.
9. Consider consumer credit counseling
A credit counseling agency can help you review your finances and create a budget that includes monthly debt payments. If you can’t pay your debts, the credit counselor will try to work out a debt management plan (DMP) with your creditors. The DMP will often include lower monthly payments. You could make a monthly payment to your credit counselor so that he or she is in charge of distributing the payments to each of your creditors.
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10. How to pay debts without money little by little
if you wonder how to pay debts without money and you only focus on looking at the total debt chart, you will end up very stressed. If you focus on one debt at a time, your payment process will be more efficient. Track your progress, celebrate your successes, and keep working until your debt is fully paid off.