Many young families are struggling to get out of their debt. As a result of college expenses and traditionally lower salaries, overcoming large amounts of debt can be quite the challenge. Is it possible to get out of debt while you are still young? If you have big plans for your family, whether it’s to have kids or take exotic vacations, you may be looking to get out of debt.
Our Debt Story
My wife and I have successfully avoided debt for our entire lives. Working my way through college and having in-laws who paid for my wife’s college, we were in better shape than most other college graduates. Many of my friends graduated with $10k-$20k in student loans. Within a period of 6 months, they were forced to direct hundreds of dollars each month towards these debts. Not only do they have a lower cash flow, but they are limited in their possibilities. They don’t have the option of quitting their day jobs to travel or start their own business. We make saving a priority for a reason. We know that we don’t want to be stuck in a place where we are forced to get the highest paying job available. I know that the highest paying job is not always the best one.
On the one hand, being debt free gives me a great perspective to help others avoid debt. On the other hand, I never had to live through the painful experience of paying off debt. So, how does one dig oneself out of debt? How do you do it with limited resources?
How to Pay off Debt
Paying off debt is easy on paper, but harder in real life. It takes true sacrifice on multiple fronts. Here are several steps that you can take to get out of debt faster:
- Limit your Expenses – Going over your budget and reviewing your unnecessary expenses can do a lot towards freeing up extra money to throw at your debt balances. Do you need to go to the movies or eat pizza every Friday night?
- Make Extra Money – I know that I am tired at the end of the workday, but working to generate a little extra cash can do wonders for eliminating that debt. $200 each month may not sound like a lot of money, but that’s $2400 EXTRA that you could put towards paying off debt. Getting a second job or combining odd jobs for neighbors or friends can add up fast.
- Consider Consolidation – Today there are lots of options for consolidating or getting new loans to lower interest rates. There are even online loans these days. This gives you the ability to compare the value of your loans and minimize your monthly payment. Failing to consider all of your options and sticking with your original loan could mean missing out on thousands of dollars of savings in interest over the course of your loan.
Simply put, paying off debt faster than normal takes a lot of extra effort and determination. Even in the most difficult situations, young families can overcome a large amount of debt.