Getting out of debt can be painful—but the payoff is empowering! It takes a committed and consistent plan to get out of debt and stay out.
Paying off debt has a variety of benefits—less stress, increased financial security, an improved credit score, etc. It also helps you reach your important financial goals by freeing your money to use for things like an emergency fund, a down payment on a house, a child’s college education, retirement, etc.
Not only does a transition from a debt repayment plan to a savings plan help you move forward in life toward long-term financial stability, but the quicker you pay off your debt the less interest you’ll need to pay back—saving you even more money in the long run.
Below are some tips to help you on your debt free journey!
- Organize Yourself – create a list and gather details on all the debts you owe—including balances, interest rates and required monthly payments.
- Decide On Importance – tackle debts with the highest interest rates first, for maximum savings, or start with the smallest balances to quickly pay off specific debts.
- Decide Payment Amounts – consider all your monthly expenses and determine a set amount to dedicate towards paying off debt each month.
- Monitor Spending – find spots in your monthly spending where you could cut back. Monitor your spending habits and find opportunities to reduce costs and contribute additional funds when possible.
- Make It Harder To Spend – consider hiding your credit cards so you don’t keep charging. You can also remove apps from your phone and unfollow social media accounts that encourage you to spend.
- Use Credit Wisely – charge only what you can pay off at the end of the month. Avoid carrying a balance that constantly travels with you from month to month.
- Obtain Low Interest Rates – look for low interest rates on credit cards and other products by shopping around. Getting a lower interest rate can sometimes be worth it if paying down the entire balance is going to take time.
- Pay More Than Minimum – pay more than the minimum on credit cards. Making only the minimum payment can leave you in debt for years.
- Set Reminders – don’t forget to pay your bills on time. Set reminders for when payments are due or set up automatic payments to avoid late fees or missed payments.
- Use Extra Money – use any extra money received, like tax refunds, to pay outstanding debt.
Living debt free may sometimes feel out of reach, but you can transform your debt free dream into a reality by being strategic and committed to prioritizing your financial goals. If you’re ready to commit to a more secure financial future, start your journey today—it’s never too early to work towards financial success!