If you’re sick and tired of trying to manage your debt and never having enough money left over at the end of the month to really enjoy yourself, it’s time to beat that debt down and start living the free and easy life that comes with fewer financial commitments.
Here are some basic ideas to help you get out of debt quickly:
Assess the Situation
Before you do anything else, you will need to sit down and take an honest look at all of your debts. Once you know exactly what you’re dealing with, it will be much easier to get on top of your finances and beat that debt down for good, and when that happens, it’s one of the best feelings you’ll ever have.
Next, make a note of all of your income and expenses. This will show you what you’re currently spending and which things you can and cannot afford. Then, you can cut out most of your unnecessary expenditures and funnel the saved cash into paying off your debts.
Pay off Priority Debts First
Priority debts are the ones that need to be paid most urgently; the ones that are costing you the most in interest, and which charge heavy penalties should you fail to make payments. They are also the debts that will be most devastating if you end up behind on your payments, like your mortgage. Use the majority of your resources to deal with these debts first to avoid a total financial meltdown.
Pay More Than the Minimum
If some of your debt is on one or more credit cards, you should make it a priority to pay off more than the minimum from your balance because, if you don’t, you aren’t really clearing your debt. You’ll continue to be charged lots of interest and eventually the debt will spiral out of your control. If you can’t pay more than the minimum, it might be worth looking into a low-interest loan, which you can user to pay off your credit cards, then, at least you will be paying a smaller amount of interest each year.
Talk to Your Creditors
When you get into financial difficulties, it can be tempting to bury your heat in the sand and avoid those to whom you are indebted. This is rarely a good idea and could see your creditors taking action against you to recover debts. It is much better to be proactive, get in touch with your creditors and try to come to some sort of arrangement, like paying a smaller amount and having interest frozen until you’re back on your feet.
Consolidate Your Debts
If you have multiple debts, it is often simpler, and more economical to consolidate them into one manageable monthly payment. The easiest way to do this is via one of the many government approved debt consolidation programs that will help you take control of your finances and get back on track again.
Make the Most of 0% Interest Offers
Right now, there are lots of great 0% balance transfer deals, which mean that you can transfer existing debts to a new credit card and pay no interest on the balance for as many as three years. If you take advantage of these offers, you can pay off your debts more quickly without the added burden if interest to hold you back.
What are your top tips for beating debt down and banishing it forever?