No one wants to be in debt, but sometimes people find themselves in debt due to life circumstances. Many people are eager to pay off their debt or eliminate it but aren’t sure how to go about it or where to begin.

There is no one perfect way to get out of debt fast, as there is no one perfect solution for everyone.

However, here are five smart ways on how to get rid of debt. The more of these you can apply, the faster you will get out of debt.

 1. Start spending less to get rid of debts

Take a good look at your expenses and where your hard-earned money is going. You can often find that you spend extra money on seemingly small expenses, which, in turn hurt your account balance. These small expenses include trips to your favourite cafe, impulse buying etc. If you reduce these extra expenses, you will suddenly have more money, that you can use to get rid of debt faster.

2. Get rid of debts by paying off the debt with the highest interest first

Some people, when it comes to getting rid of debt, prefer the so-called snowball method. In practice, this means that you pay off the smallest debts first if you have more and then moved on to the more serious ones. However, from a financial point of view, it makes more sense to pay off the debt with the highest interest rate first and only then focus on others.

Of course, the end goal in both cases is to pay off the debt. So in the end, it is up to you what strategy you choose to achieve this goal.

3. Buy things second hand to get rid of debt

When it comes to buying things, second-hand goods can be as valuable and high quality as new pieces. And if you are currently faced with how to get rid of debts, every additional dollar saved will come in handy.

Of all the online merchants in Canada, Indigo is one of the best to get second hand goods. The selection there is amazing. They have just about every new or used item you want, but on top of that, they offer great gift ideas.

Or, if you can’t come to terms with the idea that you wouldn’t buy new goods, simply wait until the debt is repaid and only then buy what you desire.

4. Stop creating additional debts

Unfortunately, this step alone will not relieve you of debts, but it will ensure that your financial situation does not deteriorate. If you add more and more to your existing debts as you repay them, you will make little, if any, progress. Therefore, resist temptation and do not create more debts, at least until you pay others, ideally never again.

Choose a solid loan that will not burden you with high fees and interest or lend you for free if you have to borrow.

5. Choose one debt and focus on it

We have already partially mentioned this step before, and it makes sense, especially if you are repaying more debts at once. Some people increase the minimum installments only slowly, but your debt is reduced very little every month. Instead, you can make visible progress by sacrificing one large payment to one of your debts each month until you fully repay the debt.

During this period, repay your other debts with the help of minimum amounts. Once you repay one debt, focus on the next and do so until all are repaid.

Useful tool is available with Moka. Moka makes debt repayment faster. You can accelerate and automate your debt payments with an easy, personalized plan.

In conclusion

The sooner you start repaying your debts, the easier it becomes. If you don’t pay it off soon, the next few years will pass regardless. So, why don’t you start now?