Drowning In Debt? Quick Lifesaving Tips

Americans are no strangers to consumer debt. The average American household carries over $16,000 worth of credit card debt. That's not including car loans or student loans. Making payments each month adds up and you may feel like a hamster caught on a wheel trying to pay it off. Here are some lifesaving tips to belt you pay off your debt sooner.

Write it All Down

The first step to paying off your debt is knowing how much you have. Take the time to write down all of the debts you have, what their balances are and the interest rate associated with it. Also make note of what payment is owed monthly. As painful as it may be to see your total amount of debt, it will give you awareness and a drive to start making progress in paying it off.

Create a Budget

The next step to paying off your debt is to create a monthly budget and to stick to it. Write down your income and all of your expenses monthly. Having a budget established will allow you to live within your means each month and stop increasing your debt. It will show you where you are spending too much money and allow you to find places to cut back. You can also determine how much extra you can apply toward your debt each month.

Make a Plan

Finally, in order to make progress on paying off your debt, you need to make a plan to do it. There are many different methods to paying off your debt sooner. You can try the debt snowball where you make minimum payments on everything but the smallest debt. You apply as much toward the smallest debt as possible and once it is paid off, roll that payment onto the next smaller debt.

Some people decide to pay off the debt with the highest interest rate first. This allows them to pay the smaller amounts toward interest, but may not be as encouraging because it can take longer to pay off debts with a higher balance.

Other Quick Ways to Pay Off Debt:

- Take advantage of balance transfers with 0% interest rates.

- Put any windfalls of money towards paying off debt, such as tax refunds or bonuses.

- Remove your credit card number from online stores. It will remove that urge to impulse shop online and cause you to think twice before making a purchase on credit.

- Sell unused items in your home and apply the money you make toward your debt.

- Find ways to enjoy arts and entertainment without spending a lot of money. This will allow you to enjoy your leisure time without accruing debt.

- Build in a category of your budget to “blow” money. Make sure the amount is reasonable and allows you to achieve your goals, but also gives you the opportunity to enjoy yourself and spend some money guilt free.

Don’t let your debt hold you down any longer. There is a way to pay it off and live a financially prosperous life. Call Carolina Money Minders today to discuss your strategy toward financial freedom.