5 Tips for Getting Out of Debt In the Middle of a Pandemic

Managing finances is challenging as it is, and doing so is now all the more difficult due to the coronavirus pandemic that has left the world’s economy in shambles. Because of the health crisis, many businesses were forced to shut down their doors, loads of employees became unemployed, and banks recorded an increase in loan requests. 

Attaining financial freedom is now tougher than ever, especially if a person is drowning in debt. Worse, constantly defaulting on debt repayment agreements could reduce one’s spending power, land in jail, and cause anxiety. 

Here are some tips for finally getting out of debt even in the middle of a pandemic:

1. Stick to a clear budget

Proper budgeting is crucial to managing finances effectively. Creating a spending plan for the money and strictly following it ensures that a person has enough money for their necessities and wants and helps manage resources according to needs. This is especially crucial in a time of economic depression and growing debt. It keeps one out of financial strain while helping them work their way out of debt, serving as a guide to eventual financial freedom and independence.

2. Find an extra source of income

Extra money during this troubling time can help facilitate the debt repayment process. While there are fewer jobs at the moment especially with the current state of the world’s economy, finding an extra source of income such as freelancing can help one get out of debt. Some reputable platforms for finding freelancing jobs at low cost are UpWork, LinkedIn, and Fiverr.

3. Improve spending habits

Bad spending habits and poor money management are some of the major causes of debt. People who spend on unnecessary items or unbeneficial investments while in debt leave them at the risk of widening debt gaps. Improving spending habits to suit current financial situations, such as saving every extra money, investing in profitable ventures, and avoiding spending on insignificant investments are some of the best ways to maintain financial independence and wealth.

4. Pay off loans whose interest keeps accumulating

Snowball method might put one in more debt in cases where there are loans with high-interest rates which aren’t the smallest loans. A better strategy to stick to is the avalanche method since it helps one save more off interest rates. It involves creating a list of all debts with their interest rates then commencing a regular payment method on the one with the highest interest rates. Doing this consistently will help in clearing or managing debt.

5. Stop payment using bank cards

Taking advantage of the e-banking system may be convenient, but mobile transactions and debit and credit cards can cause more financial problems in the long run, particularly for those with poor money management skills. On the other hand, using cash as much as possible or going traditional with banking can help avoid unnecessary spending.

Conclusion

Debt can ruin one’s financial situation without proper management regardless of the amount of money one has. Getting out of debt and building wealth during the pandemic is hard, but it is possible to pay all debts off by following the tips mentioned in this guide. Another way to restore one’s life and get financial freedom is to seek the expertise of skilled debt consultants.

DebtHelpers.ca provides customized debt solutions for all Canadians. Contact now for a free consultation!