10 Steps To Being Debt-Free In Less Than A Year

steps being debt-free less than one year

Debt can be one of life’s most daunting challenges. It can lead to feelings of anxiety, frustration, and powerlessness. However, achieving financial freedom is possible! With the right mindset and a few simple steps, you can become debt-free in less than a year. 

Here are ten helpful tips to get you started on your journey to ditching debt in less than one year: 

1. Take Stock Of Your Debt 

Before you start tackling your debt it’s important to understand what exactly you owe and how much each creditor charges for interest. 

Make sure to write down all the details including balances, interest rates, minimum payments, due dates, etc., so that you have an accurate picture of where you stand financially, and what your first step should be. Which debt should you prioritize? For example, you can get rid of IRS debt with a tax forgiveness program

2. Create A Budget Plan 

Establishing a budget is an important step in getting your finances under control and achieving your financial goals. Take the time to assess all of your expenses and income sources, so that you can create a comprehensive plan outlining how much money should be allocated toward each item. 

By having a thorough view of where your money is going, you will be able to identify areas where costs can be reduced or funds saved for debt repayment. 

Additionally, tracking any changes in income sources or expenditures regularly will help keep you on track with meeting your financial targets. 

3. Speak With Your Creditors 

If you are having trouble making your payments, don't be hesitant to contact your creditors and start a conversation. Several lenders have programs that enable you to lower or reorganize monthly payments, assisting you in staying current on payments without the need to obtain a separate loan or pay additional fees. 

4. Prioritize Debts With Higher Interest Rates 

When it comes to repaying your debt, it is important to focus on those debts with the highest interest rates first. This will save you money in the long run as the amount of interest being charged will be reduced over time. 

5. Make More Than The Minimum Payment 

Making only minimum payments will do very little in terms of reducing your total balance and may even lead to higher interest payments down the line. It is best to pay more than the minimum required each month so that you can make a dent in your overall debt. 

6. Take Advantage Of Tax Benefits 

Some forms of debt, such as student loan debt, are eligible for tax deductions which could potentially reduce your tax liabilities and free up more funds for repayment. 

Check with the Internal Revenue Service to see if this option is available to you. 

7. Consider Consolidation 

If you have multiple debts it can be a good idea to consider consolidating them into one loan. This will make it easier for you to manage as you will only have one payment each month and, depending on the terms of the consolidation loan, may also help you save money in the long run. 

8. Utilize Windfalls 

Any extra funds that come your way should be immediately dedicated towards debt repayment rather than spending them elsewhere. Windfalls include bonuses from work, tax refunds, or even lottery winnings! 

9. Cut Out Unnecessary Spending Habits 

Take a look at where your money is going each month and consider making cuts to areas that are not necessary. This can include shopping sprees, eating out, or even subscription services such as Netflix or Hulu. 

10. Seek Professional Help 

If you find yourself in over your head with debt, don’t be afraid to reach out for help! There are many organizations that offer free advice and counseling on how to tackle debt and it is always best to seek assistance before the problem grows too large. 

Ditch Debt 

Debt isn't easy but it doesn't have to be a life sentence either. By taking stock of your finances, budgeting efficiently, speaking to creditors, prioritizing debts with higher interest rates, making more than minimum payments, and taking advantage of available tax benefits and professional help, you can successfully pay off your debt and start living a more financially secure life.

Official Bootstrap Business Blog Newest Posts From Mike Schiemer Partners And News Outlets