3 Ways to Get Out of Debt and Stay Out of Debt

Paying off your debt fast

Did you know that the average American family spends 40% more than what they earn? It?s important to understand the state of your finances, and many Americans are realizing that their debt has ballooned to a point where it?s hard to keep up with.

In fact, the average household pays over $6,000 in interest alone every year. By getting out of debt, you can reduce your overall spending simply because you won?t have to continue paying interest on money you?ve borrowed.

How can you get out of debt — and stay that way? Here are a few suggestions.

1. Start Tracking Your Money

In 2016 there?s no excuse for not keeping track of your money. There are numerous apps, products and websites that are intended to help you do just this. By keeping track of all your debts and all your expenses, you?ll be able to see how things add up (do you really need to be spending $150 in restaurant food every month?), and you won?t accidentally miss a car payment because it gets buried under your other bills.

2. Get Cash for Annuity

Do you have an annuity from a lawsuit, lottery winning, or something else? An annuity is a set amount of money you receive every year. This can be frustrating when you owe money now and you are looking to reduce debt. One option that exists is getting cash for your structured settlement. Though you?ll need to pay a fee to do this — usually around 10% — you can make this money back in the interest you save yourself from having to pay. And you?ll have less stress! If any money remains, you can invest your money and see it grow.

3. Cut Your Cards

If you have a bad habit of impulsive spending, you may want to consider cutting up your credit cards (and keeping just one for emergencies). Use cash or debit cards instead so that once you?re out of money, you can?t keep spending — this can help to retrain your mind regarding how to process ?what I can spend.? Another good idea is getting creative. If you absolutely love having quality coffee in the morning but it?s costing you $50 a month to go out for your coffee — why not invest one time in an upscale coffee maker?

Will you be cutting your cards, getting cash for annuity, or tracking your money? Let us know.