There are ways to pay off debt as there are ways to not pay off debt. Starting a business with the goal of generating profits to pay off your debt is a good idea of a bad way to settle your debt. Not because a business is a bad idea, but because business takes time and demands money you already don’t have. You could, however, start a lucrative side hustle that produces quick cash (more on this later).
There are two major debt repayment methods called the debt snowball and the debt avalanche. They both involve listing out your debts and dedicating funds to paying them off. The major difference is the order to which you pay them off.
The Debt Snowball
With the debt snowball, you list your debts in order from the lowest to the highest amount regardless of interest. You then devote most of your funds to paying off the smallest one while making the minimum deposits on the others. Once you pay off the smallest, proceed to the next and repeat the process.
The Debt Avalanche
List your debts based on the highest interest rate to the lowest interest rate, regardless of the amount. Dedicate your funds to paying off the ones with the highest interest while making minimum deposits on the others. Do this until you pay off the debt with the highest interest, then move on to the next and repeat the process.
Make Lifestyle Changes
Chances are your current living and college loans have you up to your eyeballs in debt. For people with a net worth below $100,000, the best way to generate funds quickly is rarely by investing (except you take part in high-risk investment which is unwise at this point), it is by freeing up funds through changes to your lifestyle. We’re talking about frugal living.
Being frugal does not mean being cheap, it means cutting out unnecessary expenses like the Netflix, Disney+, and Hulu subscriptions, bottled water, and takeout.
Sell Old or Unused Stuff
This could be an extension of frugal living. You can sell off things you don’t need. It is an important part of the whole process of scaling down your life. One of the most popular things to sell is your used car. Your car probably contributes to your debt via car payments, so selling it not only fetches extra funds, but it also frees you from extra payments.
Getting a potential buyer to pay your car’s value may be difficult if you do it alone, especially if you don’t have experience. You could try selling it to a dealership, but if you cannot value your car, you may not get the best deal. And cars don’t come with a pricing guide, but things like the type of car, mileage, and condition have a role to play in calculating your car’s value.
The whole process of selling to dealerships seems arduous, that’s why we recommend going through a dedicated car buyer. Car buying services specialize in buying cars at its value and selling them at a good price. They run all necessary tests, handle paperwork, run a test drive, and some even give a free appraisal.
Setting up an appointment with them is as easy as running a sell my car search through a search engine, especially if you live in Australia.
You can sell other items like china you don’t use, expensive jewelry, electronic appliances, extra or unneeded furniture, and gift cards.
Start a Side Hustle
There are differences between a business and a side hustle. A significant one is that a business takes time and funds while a side hustle generates quick cash. Keep this in mind when starting a hustle. One of the side hustles that earns cash quickest is sales. The product you sell should be in high demand and easy to exchange. One that comes to mind is a niche sector within the beauty industry—eyelashes.
The lash sector can be profitable for an innovative seller. There are several options to choose from. You could sell natural lashes, false lashes, magnetic lashes, eyeliner, lash glue, and other lash accessories. You can also offer exclusive deals on a magnetic lash kit complete with magnetic eyeliner, glue, and other fancy magnet lash and liner accessories.
You should integrate a side hustle like this that can generate quick cash with other efforts to pay off your debts.