How to Pay Off Debt Fast
How to Pay Off Debt Fast and Stay Debt Free
These strategies will show you how to pay off debt, and are not unique – you may have heard them before. However, if you feel like you’re drowning in debt and don’t know what to do about it, you’re not alone. The average couple in the USA is faced with $15,000.00 in credit card debt alone in a 2014 analysis and it is climbing.
Some folks say there are some easy ways to learn how to pay off debt, but we both know, it is not easy. If it were, nobody would have open credit card debt.
I know I’ll hear some moaning on this, but you really need to make a budget, and it needs to be one that is realistic. If you make a budget that is so restrictive, you will soon stop following it.
There are many ways to make a budget, from setting up your own Excel spreadsheet to buying a sophisticated budgeting software program. I personally prefer going with a good budgeting program that will help you to put every dollar to work and show you how to pay off debt quickly.
[bctt tweet=”Making a budget is definitely not the hardest thing to do.” username=”HBSMoneyTips”] If you use a budgeting software program, most of the work is done for you. One of the most important points to remember is that you must get a handle on your spending and get it under control. And yes, I agree that it is not easy to do. You must make up your mind that you need to learn how to pay off debt now.
Make a list of your credit card and other unsecured debt like student loans. If you have a number of federal student loans, it generally is advisable to consolidate them and have one loan with a lower interest rate. Keep those separate for now. On the credit card debt, make a list by balance, monthly payment, and interest rate. You will concentrate on paying off the highest rate card first. This is how to pay off debt.
Add as much extra for principal with each payment, and you may even be able to make more than one payment each month. If you happen to have one or more cards with a very low balance, you could also repay those. Seeing a zero balance on a card helps some individuals like a pat on the back. You need to know, that by only paying the minimum payment, the card issuer states, will keep that card open for many, many years. That is not how to pay off debt.
Learn How to Pay Off Debt and Stay Debt Free
Sometimes a balance transfer can be used to save interest being paid. If you have a high interest rate card that has a balance that you are 100% positive that you can pay in full before the balance transfer period expires, this can help. However, if you don’t pay it in full, you can get hit with penalties. You can save an appreciable amount of interest this way and is how to pay off debt faster.
To coincide with taking control of your spending, be sure that it includes stopping credit card spending. Much spending that goes to a credit card is impulse for wants and not needs. I realize this is a generalization, but we’re here to see how to pay off debt, not to create more
To stop creating more debt, remove all credit cards from your purse or wallet and put them away for now. When you go shopping, go with cash or don’t go at all. Don’t be concerned with the rewards and other nice perks some of the credit cards offer. For now STOP using them.
If your job pays a bonus at the end of the year or some other period, use it to pay off the credit cards. The same applies to any income tax refunds, apply them to outstanding debt. If you’re an individual in a household or have a spouse, it will take some sacrifice to accomplish this. But this is how to pay off debt and it works.
Also, be sure to stop all of those online purchases as well that end up on a credit card. Delete the cards from their files if necessary. Online vendors love to store your credit card information so that your shopping is more convenient.
Some planners get aggressive and say another way to show you how to pay off debt is to gather unwanted birthday or wedding gifts and sell them. If you decide to go this route, be very careful as it could come back to bite you. Having a yard sale and a friend or relative seeing their gift on the table could be very embarrassing.
How to pay off debt is not to create it in the first place. You need to change your daily habits since this is probably how you acquired so much debt. I personally prefer getting a part time job if possible and using it all to get rid of the credit card debt once and for all.
Any good budgeting software program, besides showing you how to pay off debt, will advise you to reward yourself as you reach various goals. Don’t go all out, but be reasonable. This will help to keep you motivated to get rid of debt.
My wife and I have no outstanding credit card or other debt now after following the advice mentioned above. However, I do use one credit card to have utilities charged, auto expenses, etc. The card is repaid in full every month, but the rewards we receive for the charges can be sizable. Nothing is charged that won’t be repaid in full. This is how to pay off debt that has worked for us for many years.