Debt always seems to be hanging over our heads. Life will feel so much lighter if we could get out from under the mountains of debt that we accumulate. This is not so easily done. There are times when it was out of our control, like medical bills, and times it is in our control like your choice in home and car. Either way, there are things we can do you lighten the load.
Save
Saving money can be challenging for many people just starting. When you set your budget pick a percentage that will go into savings. This will be a buffer and safety net that you are building in for yourself. If an unexpected bill pops up instead of using a credit card, you can save the interest and pay it off. Also, saving for large items that are not necessities instead of financing will save you money. You may not be able to get it the minute you want it, but it will cost you less if you save for it before purchasing. And you will appreciate it more knowing you worked hard to obtain it.
Tax Refund
We all look forward to hopefully getting a large tax refund. Instead of dreaming about all the ways you will spend it, put it toward any debt that you have. Any large amounts of money you get should go toward debt before anything else. It’s hard to see the impact when just paying the minimum. Paying these large sums will help you make progress. When you watch the amount going down will help keep you motivated to pay it off completely.
The Debt Snowball
Dave Ramsey pushed the snowball method. In this method, you list your debt from smallest to largest. Then your goal is to pay off the smallest debt first while only making the minimum payments on the others. Once one is paid off, you continue the trend until they are all paid off. Focusing on one at a time. Having the smaller debts get paid off quickly will keep you going. Watching progress is the best motivator. Dave Ramsey has more tips on his website on debt and other money topics.
Cut the Fluff
If you do not see any progress paying off debt, then you need to reassess your budget. Everyone loves all the many conveniences there are, but we don’t need them. Stop getting coffee on the way to work every morning. Get rid of cable and find a cheaper service, or use nothing until your debt is down. No one needs the newest phone. Other ways we waste money are on expensive hobbies. Instead, maybe look for part-time work to help chip away at the debt faster. There is fluff in ever budget. It is just a matter of finding what you can live without until you have eliminated your extra debt.
Lift off the weight of debt one step at a time.