Feeling overwhelmed by debt and wondering how on earth you’re going to pay it off? You’re definitely not alone. Money stress is something we all deal with—there never seems to be enough, and we’re always chasing more. If you’re hunting for simple ways to tackle that debt, you’re in the right place.
Before diving into paying off your debt, take a moment to figure out exactly what kind of debt you’re dealing with. Whether it’s credit card debt, student loans, or a mix of everything, knowing what you’re up against can help you create a solid plan to pay off debt effectively.
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1. Know what you owe.
Knowing what you owe will help you pay off your debt. Before creating a debt payment plan, you’ll need a realistic idea of how much you owe and to whom. Start by making lists of each debt, the payoff amount, the monthly payment amount, and whether or not you’re current on your payments.
2. Contact your creditors.
If you are falling behind on payments, it’s a good idea to contact your creditors before your account gets sent to collections. Collection agencies are much more aggressive (and annoying) at collecting debt. Your creditors are more likely to work with you if you contact them. Know your rights when it comes to dealing with a debt collector.
3. Create a budget.
If you’re trying to pay off debt, making a budget is a smart move. It helps you see where your money is going and keeps you focused on your financial goals. To make it even simpler, try using a budgeting app. It’ll help you track your spending and keep you motivated.
4. Pay off the most expensive debt first.
Sort your loan interest rates from the highest to lowest, then tackle the card with the highest rate first. If you pay off the balance with the highest interest rate first, you increase your payments on that loan while still making the minimum payments on your other loans.
5. Pay more than the minimum amount due monthly.
Want to pay off debt faster? Paying more than the minimum payment each month can make a HUGE difference! It’s like giving your debt a double punch – it can lower your credit score and keep you from maxing out your cards. If you can only manage the minimum, that’s okay – just make sure you’re on time!
6. Stop spending money.
If you want to stop accumulating more debt, stop spending money! You may want to consider a “spending freeze”, which means you stop spending money on anything outside of the necessities. This will be a hard step if you like to spend money, but you need to get your finances under control.
7. Manage your subscriptions.
Using an app like Rocket Money will help you find and cancel unwanted subscriptions. It can also help you keep track of all other subscriptions and stay on top of your bills. Rocket Money has other features, such as spending insights, budgeting, pay advances, autopilot savings, and more.
8. Start a side hustle.
Thinking about picking up a side hustle to help pay off debt? Starting a blog could be a great way to bring in some extra cash. Just keep in mind, it’s not a get-rich-quick scheme, but it can definitely boost your income. If blogging doesn’t sound like your thing, no worries—there are other options like babysitting, housecleaning, or selling your crafts on Etsy. Check out these ideas and see which one works best for you to make that extra money!
9. Consider debt consolidation.
If you’re feeling overwhelmed by debt, debt consolidation might be just what you need. It lets you roll all your debts into one easy monthly payment, and sometimes you even get a lower interest rate. Believe me, paying off debt with a single loan is way less stressful and quicker than juggling a bunch of minimum payments.
10. Track your progress.
The key thing is to keep tabs on how you’re doing. Tracking your progress is a great way to stay pumped up, even when it feels like you’re stuck in a rut. Sure, there’ll be days when paying off debt feels like it’s going nowhere, but there will also be moments when you’re stoked about the strides you’ve made. Trust me, the end result is totally worth it!
Start paying off debt today!
If you’re really aiming for financial freedom, it’s time to get serious about paying off debt. It might be tough and there might be some frustrating moments, but trust me, it’s totally worth it in the end. So, what steps are you taking right now to say goodbye to that debt?
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