Unfortunately, being in debt is something many people can relate to and living paycheck to paycheck is more common than not. The types of debt many struggles with been wide-ranging as well, whether it is from their car, past schooling, or medical expenses. No matter the case, owing money can be extremely stressful, especially if you are in a position where you can’t afford to make repayments. Fortunately, there are more possibilities than ever before for getting in control of your debt. Even better? Nowadays, more and more people are going from being deep in debt to grow their net worth to heights they had never imagined before. The first step to achieving this is to understand all the different ways you can approach how you spend and save your money.
Refinancing remains one of the most popular ways to decrease lower monthly payments. Doing so includes getting a better deal on the often-high interest rates you pay with your current loan. For example, if you have a student loan repayment plan with a high-interest rate, you can consider refinancing the loan with a private lender. The lender will offer you a new loan, often with a much better rate and flexible repayment plan. You can use a student loan refinance calculator to know what to expect to pay. If the rates look favorable, you can check out the top private lender websites and from there you can submit an application.
2. Cut Back on Expenses
This one may seem like the most obvious choice, but it is one that many still struggle with. Fortunately, cutting back on expenses, once you get into it, becomes like second nature. You can do so in a number of ways, including by cooking at home, switching to a cheaper cell phone plan, cutting out unused monthly subscriptions, and making use of coupons and discounts. The cash you save from doing so can help pay for debts and grow savings.
3. Find New Sources of Income
The best way to both pay back your debt and grow your net worth is to find more sources of income. The options for extra income are nearly endless these days. Many take on freelance work, which can involve such things as freelance writing, graphic design, photography, translating, becoming an exercise trainer, or tutoring. Chances are, if you’ve got a skill, you can make money off of it. Like with cutting back on expenses, you can use this extra income on your debt and savings.
4. Invest Wisely
Lastly, where you put your savings can make all the difference in increasing your overall wealth. Instead of just letting savings sit in a savings account where it doesn’t grow or earn interest, put your money in a Roth IRA account. You can increase your wealth tremendously by following this path, especially if you begin investing early. For instance, putting just $100 monthly in a ROTH IRA starting at 20 can see you growing a net worth in the hundreds of thousands by the time you retire.