Erasing Pandemic Debt: Getting Out of a Hole You’ve Dug

looking at finances

The US is currently facing a different time because of the pandemic. It’s not so good to start a business right now because businesses should be closed instead. This pandemic has already taken its toll on employees and businesses as they’re trying to stay afloat.

If it’s not enough that the situation right now is hard to navigate; people are trying to get out of debt, and they’re finding that hard to do since a good majority lost their jobs to business closures. Some businesses are even seeking the help of a bankruptcy attorney so that they can figure out what’s the next step if they’re in trouble.

There are a lot of things they can do. For example, they could consider getting out of debt using a balance-transfer card to avoid any interest, or they could also use other methods. Here’s what people with a debt problem during the pandemic can do.

So, you’ve got a debt problem…

The very first thing you should do is not to panic. In today’s world, you can do a lot of things to get out of debt.  Credit cards and personal loans aren’t designed to keep you in debt; they’re designed to help you out of debt. It’s just how you plan to pay it off that might be the problem.

It’s not bad to use credit cards during a pandemic, either. So many people have lost their jobs through lockdowns or closure of businesses that they’ve been forced to take on debt. If you have some sizable debts to pay off, you’ll need to rely on some strategy to pay it off. It does require a bit of patience and some discipline to pull off.

Doing the debt snowball method

It’s ironic how one of the methods of paying debt involves a description of how you might have incurred it in the first place. There is a debt payoff method called the ‘debt snowball’ where you pay off the smallest balance first. You work with the banks this way, paying off just the minimum you can on every debt.

The way it works is that once you’ve finished paying off the smallest balance, you transfer the amount to the second smallest. Then, you keep on paying these minimum fees until you manage to pay off the largest of your smallest debts, surprisingly ending with no more debts to pay.

Using a balance-transfer credit card

macro shot with old credit card

Suppose you’ve got a credit card you know you won’t be able to pay. In that case, you can try to solve your debt problems using a balance-transfer credit card.

This card is used to pay off credit card debt and if you don’t have enough cash flow to pay off your debts anymore. They usually have a lower interest rate, and you can also bring all balances into one handy card to pay them off with.

It can be pretty stressful to keep track of all your debts as well. But, with only one account to manage, you can focus on other things to do during the pandemic, like keeping yourself safe and preparing for the worst, whatever that may be.

Budget your expenses

One of the best ways to pay off your debts is to minimize your spending. You can do this by updating your budget and seeing areas where your cash flow is going out. If it’s to something you have no need for anymore, or don’t need in the first place, then you can cut that out.

Cutting off unnecessary expenses is a perfect way of keeping yourself out of the red in debt. You can do the same thing by keeping your expenses at a minimum. Consider this: if you have many entertainment sites you’re subscribed to, you can cut off the others and only stay subscribed to one.

Getting a second income

In these days of working at home, it’s easier to find time for something else. But, with a lot of bills to pay, a side-hustle is one of the best things to do to keep your troubles down.

Working part-time means that you wouldn’t be taxed because you’re essentially doing something part-time. You can also work in a retail store or food delivery service for that extra money. Then, if you don’t have payments to accomplish anymore, you can continue working for a little extra cash.

The key to getting out of debt is smart spending. During the pandemic, this is more important than ever. You’ve got a lot of stress in keeping yourself away from the virus; stress from paying debts is something you can do without.

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