Do you have a credit card? Most Americans love a good credit card. American credit card debt was nearly $444 billion in 2019. And it’s no surprise because they have some of the most lucrative deals in terms of rewards in the world. With phone contracts, payday loans, and mortgages it’s all too easy to feel as if you’re drowning in debt. So what should you do?
Don’t despair, paying off debt is not that hard if you have an effective system in place and also the willpower to stick to it. Here’s what you need to know about how to pay off debt.
Slow and Steady Wins the Race
When you have a huge mountain of debt before you, it’s easy to feel overwhelmed. But don’t think about your debt in terms of one huge block you need to pay back. Consider the avalanche method for credit cards, paying off your biggest debt first.
Break down your weekly and monthly expenditure. If you don’t already have one make yourself a budget and see how much spare cash you have each week and how much you could afford to pay back. Be honest with yourself. Don’t try to pay back too much each week and burn yourself out or get away by paying back tiny sums that are insignificant either. You need a happy medium.
Remember slow and steady wins the race when it comes to debt and paying back a manageable sum each week or month will soon start to add up. Once you are debt-free, you should take steps to avoid being in debt again so that all your efforts don’t go in vain.
Make Savings: Cut Back!
Want to know the best way to save money to pay off debt quickly without really feeling as if you are? Make savings in your weekly or monthly budget. And you can do this in all kinds of ways? Does your supermarket have a loyalty reward scheme? If not consider changing to one that does and use any free coupons and rewards that come with it.
Do you always buy a certain brand or food? Try using a cheaper brand instead and see if you can taste the difference. If you don’t notice then stick with that brand.
If you waste endless amounts of money on subscriptions to Netflix, Amazon Prime or other services ask yourself if you really need them in your life? Could you find a friend or family member to pair up with so you go halves on one subscription or one person pays one platform while you pay for the other?
There are lots of small savings you can make without even realizing it that all add up. Be smart and savvy and see what a difference this can make. Then think about these 4 skills that will help you stay debt-free forever!
If you are struggling them be sure to use a budgeting app that can break down your expenses and bills in pie charts and spreadsheets.
Drowning in Debt? Don’t Despair Budget and Save
We’ve all been there. Feeling like our life is out of control and we are drowning in debt. But there’s no need to panic. Arrange a payment plan that works for you and pay back your debts little-by-little.
Complement this by evaluating your weekly and monthly spending habits and think carefully about how you can make savings and if you really need all of those subscription services you have?
If paying off debt is one of your new year’s resolutions then be sure to click here to see what my 2020 goals and objectives are.