Find the best way to pay off debt
Find the top tips on how to eliminate debt (for good) at http://dedebt.com/best-way-to-pay-off-debt/.
Find ways to stay accountable & motivated: read success stories, take occasional breaks, reward yourself, etc.
As with any goal, it’s important to find ways to stay accountable. It can be particularly difficult to stay motivated by the debtors. The good news is the more debt you pay off, the less interest you’ll owe on each payment.
Reading other people’s success stories can help motivate you when you’re feeling discouraged, and help visualize your end goal. Still feeling discouraged? Try taking a break from debt repayment. Scale back on how much you’re going to pay back and pay for money. Maybe grab a fancy coffee, take a trip to the beach or buy a new pair of shoes. Taking a breather will give you a taste of your budget.
Tell a friend about your financial goals
Tell someone out loud that you want to pay off your debt. It might be a scary thought, but your goal is to help you keep track of your goal. When deciding who you want to tell, consider spending the most time with. Your friends will be more likely to think about doing cost-friendly activities if they know you’re focused on paying off debt.
Do not put yourself in a position where you will be tempted to spend money
What caused you to get into debt in the first place? Asking yourself this question will help you in your budget. Here are some actions you can take to avoid temptations:
- Stash away credit cards in places that are difficult to access, or have a friend
- Avoid shopping malls unless you need something – do not visit the mall just because you’re bored
- Carry snacks and meals with you so you’re not tempted to buy
- Wait 24-48 hours before purchasing an item over $ 100
Scale back on savings until you’re debt-free
A lot of people are hesitating to cut back on their savings, even if it is to help pay down debt. While savings are a priority, you can save money in the long run. You do not have to stop saving money altogether, but try to reprioritize where your money goes.
Considering the money you’re putting towards savings by 10-15%, and using that extra bit towards debt repayment instead. Then, your debt goes down, allocating towards savings. The more debt you pay off, the farther your payments will go towards the principal and not just interest. So, how much does it cost you to repay your milestone, increase the amount you’re contributing to your savings by 2-3%.
Create an additional income stream
You can only cut back your spending by so much. If debt repayment is not fitting in your budget, it can be used to earn extra money. Since you’re in the process of making money with your current income. Picking up an extra job (even on the last day) means you’ll be busier. So, not only will you be earning extra income but you will also be able to spend money. It’s a win-win!
Simplify your debt repayment schedule
If you’re struggling to make payments on multiple bills, a debt consolidation loan is the best way to manage debt, and ultimately become debt-free. A debt consolidation loan can help you pay off debt faster, helping you save money in interest. Own your home? Try securing your debt consolidation loan at your expense.
Credit card debt?
Take a break from credit card transactions.
Put your credit card away for a few months and only make purchases with your debit card. Now, even better, opt for cash. Paying with cash will help you keep track of your spending.
Tip: Do not cancel your credit card (unless you really can not trust yourself to not use it). Demonstrating that you can use your credit card responsibly will help you rebuild your credit.
Use cash back rewards to pay down your balance
Put your rewards to good use – use any cash back you’ve accumulated to help pay down your balance. Most credit cards will allow you to pay directly to the balance of your card. It can be used to save money for your money, but you need to pay more.
Be careful – you might lose rewards.
Once you’re debt-free, allocate your debt repayment budget towards an emergency fund
Always use your credit card for emergencies? Even though it may seem like a good idea at the time, it can quickly become overwhelming. You’ll never break the debt cycle unless you have an alternative plan to pay for emergency expenses. After your debt is paid off, continue to allocate the money you have spent on an emergency fund. You’re already used to living on a budget, so it will be easy to build your savings and prepare for any future emergencies.
Change your spending habits
Paying off is important for your financial future. However, you’ll never have full financial freedom unless you address the root of your debt problem. It’s important to change your spending clothes if you want to stay out of debt. Educate yourself about money management and the importance of budgeting so you do not spend more than you can afford to pay back.
Paying off debt will not happen overnight. But if you’re committed to your goal, you can be a little bit faster than you think. It could be your goal, but having control over your finances will give you more freedom and flexibility in the future. Now, that’s something that should motivate you to reach your financial goals!