One of the smartest things you can do with your money is to use it to pay off debt. But if you’re like most people, you probably have several different debts to repay – credit cards, student loans, personal loans, etc. – and the monthly payments can be overwhelming.
Here are 9 tips to help you save money and get out of debt faster.
1 . Make a budget and stick to it.
This may seem like a no-brainer, but it’s important to take a close look at your income and expenses so you know how much you can realistically afford to put towards debt repayment each month. Once you have a budget in place, make sure you stick to it by tracking your spending and keeping the temptation of impulsive purchases in check.
2. Attack the debt with the highest interest rate first.
It may be tempting to focus on paying off smaller debts first so you can see some quick progress, but experts say it’s better to focus on the debt with the highest interest rate first. Why? Because the longer it takes to pay off a debt, the more money you’ll end up paying in interest. So even if it means making bigger payments each month, tackling the debt with the highest interest rate should be your priority.
3. Make more than the minimum payment.
Once you’ve identified which debt needs to be paid off first, make sure you’re paying more than just the minimum due each month. Even an extra $50 a month can make a big difference in how quickly you pay off your debt. And every dollar you save in interest is one more dollar that can be applied towards another debt or saved for future goals.
4 . Set up automatic payments.
If you have trouble staying on top of your monthly payments, set up automatic payments from your checking account to your creditors. That way, you’ll never have to worry about missing a payment or incurring late fees again. Just make sure you have enough money in your account to cover the payments!
5 . Negotiate for a lower interest rate.
If your credit score has improved since taking out a loan, call your lender and see if they’re willing to lower your interest rate. A lower interest rate means less money spent on interest over time, so it’s worth asking even if they disagree immediately.
6 . Refinance high-interest loans at a lower rate.
If you have good credit, consider refinancing high-interest loans at a lower rate. This will reduce the amount of interest you pay over time and help you get out of debt faster. Be sure to shop around for the best rates and read the fine print before signing any paperwork
7 . Get a 0% APR credit card and transfer balances.
If you have good credit, another option for saving on interest is getting a 0% APR credit card and transferring balances from high-interest cards. Just be sure that you’re able to pay off the balance before the introductory period ends, or else you’ll be stuck paying interest at the regular APR , which will negate any savings.
8 . Use Windfalls wisely.
Unexpected income, such as a bonus at work or tax refund , can be tempting to spend but try to resist urge . If possible , use that money towards paying down debt so that can get out of financial hole even faster .
9 . Get help from a qualified professional.
Feeling overwhelmed by debt? Don’t try to tackle it alone! Consider working with a certified credit counselor or financial planner who can help come up with a personalized plan get rid of debt and improve financial health long run.
There no denying that getting out of debt requires hard work and self-discipline But following these tips can help make the process a little easier helping achieve freedom from financial burden even sooner than thought possible “;
Being in control of our finances is something we all strive for but oftentimes find difficult to achieve While getting out of debt won’t happen overnight following the above tips bring us a closer goal to becoming a financially healthy individual “;
Debt does ‘t have to define who is With proper knowledge and tools available anyone conquer their debts once lead better stress free life “