If you’re considering a career shift to nursing or venturing into self-employment, it’s critical to establish a robust financial plan. This can help increase your chances of success while decreasing risks. Freeing yourself from the burden of expensive debt is a crucial aspect of this plan. Monetary stress can quickly disrupt your plans, creating issues when you dive into a second career. Thus, we would like to share five strategies for more rapid debt elimination, enabling you to embark on the next chapter of your life sooner.
1. RESTRUCTURE CREDIT CARD DEBT
In the U.S., a typical household with credit card debt owes over $16,000. Owing to high-interest rates, such debt can inhibit those aiming for a career change. A smart initial step is transferring your existing debt to cards offering 0% annual fees and lower interest rates. Although this involves a transfer fee, the reduced rate can facilitate the formation of a feasible repayment plan that tackles the debt, not just the accruing interest. Remember to scrutinize the terms of the card you choose, as some might hike up interest rates once a specific timeframe elapses.
2. DEVISE A REALISTIC BUDGET
Based on recent Freedom Debt Relief surveys, only a handful of individuals in debt have a realistic budget. It’s time to develop one if you fall into this category. A practical budget considers both your actual income and the indispensable expenses you incur each month. Begin with your income and list down the non-negotiable expenditures, such as rent or mortgage, essential utilities (water and electricity), transportation costs for work, groceries, and minimum debt reimbursements.
Allocate more funds to debt repayment, but to maintain practicality, start small. Remember, significant changes don’t happen overnight, and you don’t have to change your lifestyle drastically at first. Setting unrealistic goals might lead to abandoning the budget altogether. As you adjust, you can gradually strive for quicker debt settlement.
3. STRATEGIZE YOUR DEBTS
Not all debts are created equal, and everyone’s perspective on their debt is unique. Therefore, it’s useful to understand your debts clearly. Identify the interest rates and overall amount for each. For some, tackling high-interest debt first works best, but others may find paying smaller debts first more motivating, despite less interest accumulation.
4. SEEK ADDITIONAL INCOME
Taking up a second job may sound daunting, but, if you’re serious about embarking on a new career while grappling with debt, it could be a smart move. Whether you freelance as a graphic designer or serve tables on weekends, dedicate the earnings from this second job to repay your debt. It’s a challenging journey, but faster debt repayment significantly eases the transition into a new career.
5. EXPLORE FREE ENTERTAINMENT
It’s surprising how many cost-free entertainment options are available at home or locally. Whether it’s board games, free concerts, or movies, switching to cost-free entertainment can yield massive savings. Explore creative pastimes in your local park, borrow books, DVDs, and CDs from the library, or stage a family play. Before Netflix and dining out became norms, people found plenty of ways to keep themselves entertained. Save on entertainment costs, and direct those funds toward your debt.
