How much debt are you in? What is your plan to pay it off? Are you using any passive income strategies? Below is an outline of steps to take in order to dig yourself out of debt as well as some ideas on how to utilize passive incomes to help.
Step 2: Stop Spending
Find a way to cut your expenses by category. For example, skip your morning latte, or pack a sandwich to cut your food category. Cancel cable, or lower your cell phone minutes to cut entertainment. Create a budget and stick to it.
Step 3: Pay Off Debt
The easiest strategy to pay down debt is the snowball effect. Pay off the smallest balance first, and then put that money towards the next smallest, and so on. Expanding this strategy includes creating additional income.
Step 4: Get Out Of Debt Using Passive Income
Get out of debt using a stream of passive income. Passive income increases your monthly salary without spending time at a second job. Here are three easy ideas you can implement today:
- Collect Royalties. Writing an ebook has never been easier. Do you spend hours’ bargain shopping online? Have you built over 50 model airplanes? Do you watch sci-fi movies and critique them? Don’t underestimate your knowledge. Ebooks are easy and quick to write. Publishing one on Amazon is simple, and you collect royalties each time someone downloads it.
- Become a Landlord. Do you have an extra bedroom that is collecting dust? How about a finished basement that is never used? Try renting it out to a single professional, or a med student on rotation. Check out the listings in your area on Craigslist to see how much income you can generate.
- Use Cash Back Reward Credit Cards. Although overusing your credit cards is how you got into this mess, there is a way to utilize credit cards correctly. Swipe a credit card for all your monthly purchases, and then pay off your balance each month. The cash rewards you earn can be used to pay down your balance.
If you continually use the money generated from passive incomes, like earning royalties from an ebook, collecting rent, or cashing in cash back rewards, and put that towards your debt – you will accelerate progress and get out of debt using passive income faster.