Are you struggling to pay off your cumbersome debt? You’re not alone—research from the Pew Charitable Trusts has shown that 80 percent of Americans have some kind of debt.
Dealing with lots of debt— whether it’s from credit cards, healthcare expenses, or loans—can be stressful and emotional. It may seem impossible to turn things around. But, remember there are always ways to get on top of it and find a fresh start. Here are five ways you can pay off your debt, no matter what kind you’re dealing with.
1. Create a budget
First and foremost, you need a budget you can stick to each month. And creating a budget helps you understand how much money you’re bringing in and how much you’re spending. List out all of your sources of income and every single necessary expense, like rent, food, utilities, debt payments, etc. Then you can see how much you have leftover each month to either put toward your debt, save, or use for entertainment or personal purchases.
Use a resource like Money Gains, where you find the best deals out there to save you the most money each month on expenses like electricity. There’s no reason to spend more than you need to on utilities, so make use of price comparison tools like Money Gains to save where you can.
2. Pay more than the minimum
Each month, you may just be paying the minimum amount due. But how much more could you throw at your debt? Think about unnecessary expenses on your budget each month. Which costs could you do without for a few months, until your debt is paid off?
Eliminate at least one or two unnecessary expenses and put that money into your debt instead. You’ll thank yourself later. And you’ll have much more money to spend on eating at restaurants or going shopping once your debt is paid off.
3. Work with an attorney
In your efforts to pay off your debt, you may have been treated unfairly by your lender. No matter what kind of debts you have, there are debt collection laws that govern what a collector can and cannot do, including using unconscionable tactics.
If you think your debt collector has crossed the line, work with an attorney who can help you understand your rights and steps forward. Work with a law firm like Legal Rights Advocates that specializes in these matters and can help you file a complaint against the debt collection agency for violating your rights.
4. Celebrate small wins
Ok, so you may not have your full balance paid off within a couple of months of revamping your budget. But cut yourself some slack, and start celebrating wins, however small. Each time your debt dips down into the next lowest thousand, or even when you make a monthly payment on time, reward yourself. Doing so will keep your confidence up and will help you stay motivated to work hard at paying off your debt.
5. Don’t put it off
It may be tempting to keep paying your minimum payments and tell yourself you’ll deal with the rest later. But the truth is, this just means you’ll be accumulating more interest and keeping that source of stress in your life for much longer.
No matter how tight things are right now, try to alter your budget and change your thinking about spending. You’ll be surprised how much a little bit more toward your monthly payments can speed things up in the long run. Start tackling your debt right now.
Managing a lot of debt is one of the biggest financial challenges many people face. Remember that there are small steps you can take right now to turn things around. Create a realistic budget, pay more than you owe by cutting back on other expenses, work with an attorney, celebrate small wins, and get started right away.
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