Debt repayment requires patience and determination. By increasing income or cutting expenses, you can free up funds that you can put towards paying down debt each month.
Try the debt snowball method or use financial windfalls like tax refunds to swiftly reduce balances faster. Or seek assistance through a debt relief program.
1. Get organized.
If you’re having difficulty keeping track of your debt, now is the time to get organized. Gather all bills and credit card statements together; organize them by due date; place a calendar showing these dates prominently – then get back on the path towards financial freedom!
Make use of either this or the debt snowball method to prioritize paying down debt more quickly and save interest payments, freeing up cash for other expenses or emergencies.
Make an extra payment towards debt payments each pay cycle by setting aside money in an individual account for this purpose. Simply transfer a portion of each paycheck directly into that savings account at the beginning of every pay period.
2. Create a budget.
By making only minimum payments on your credit cards, it could take years before they’re all paid off. But by creating a budget and cutting expenses, this process can be expedited significantly.
Track your spending for two or more weeks to identify areas in which money is going down the drain. Making coffee yourself instead of purchasing expensive specialty drinks or searching for lower utility rates are among the many small changes that can add up to significant savings.
Next, search for ways to bring in extra income and apply it towards your debt. A temporary part-time job could be one way of doing this.
3. Cut up your credit cards.
Paying down debt is key to improving your financial health. Experts suggest prioritizing debts based on balance and interest rate, tracking spending habits and cutting back where necessary.
If you own multiple credit cards, consider cutting them up or placing them in a safe deposit box so as not to be tempted into using them. That way, no temptation will arise to use them!
Budgeting for non-monthly expenses like car repairs and vet bills will allow you to avoid borrowing money to cover them. Learn how with Financial Peace University’s free online course; it has helped millions take control of their finances and avoid debt!
4. Go on a spending freeze.
By cutting expenses, revamping your budget, and selling off clutter, you’ll have extra funds in your bank account to put towards paying down debt faster. Use it towards setting up a debt payment plan so your balances will get paid off more quickly.
Create your personal motivation for going on a spending freeze so that you stay on the path towards reaching a specific financial goal, like paying off debt to save for an early retirement.
Are you ready to transform your financial life? Financial Peace University (FPU) offers a proven plan to get out of debt. Take the nine-lesson course on your own or as part of a class today – there’s no time like now to start!
5. Get fit.
As a way of helping yourself tackle debt more easily, set yourself an achievable goal that you know will boost motivation. Writing down your goals increases their likelihood by 42% – perhaps it could be saving enough money to buy Taylor Swift tickets once your debts are cleared up or taking on new fitness challenges!
Start by subtracting your baseline budget (i.e., minimum monthly debt payments you’re capable of making each month) from your take-home income; any leftover amount represents your discretionary income that could be used either to make extra payments toward debt reduction or savings goals.
Use the snowball method, in which you pay off smaller debt balances first to give yourself a sense of achievement and remain motivated. This approach gives a boost of motivation while paying down small balances more efficiently.
6. Stop spending on entertainment.
Reducing entertainment spending frees up more funds each month to be put toward paying down debt. Forgo movies, concerts and mini golf to put that extra cash towards paying down your debt snowball!
As with brewing coffee at home instead of hitting up Starbucks can save a significant amount. Making this small switch allows you to take control of your budget and emerge faster from debt!
Find larger ways to cut back. Are there things like selling your car for something less costly, eating out less often or meal planning that could help? The more cuts you make, the faster you’ll reach your goal.
