If you have been stressing about your debt, you aren't alone. Nearly 80% of all Americans have some form of debt. Whether it is from credit cards, student loans, medical expenses, or car payments, it can weigh on your life. There are no magical means to make your debt disappear, but there are some tricks to become debt-free sooner.
Consolidate Loans
Consolidating your loans can be a great start to paying off debt faster. Rolling loans together can help you visualize exactly what you owe. Ideally, you can turn multiple high-interest rates into one lower rate. If you have a small balance, you can look into credit cards that offer 0% interest for a set amount of time. Having everything combined will also help prevent you from overlooking any payments.
Pay Over Minimum
Try your best to pay more than the minimum balance due. Only paying the minimum on high-interest loans can actually cause your balance to go in the wrong direction. The more you can pay at a time, the less interest you will accrue and the quicker you'll chip away at the balance.
Make More Payments
There are a few reasons that making two or more payments in a month is helpful. If you get paid bi-weekly, devoting a regular portion of each paycheck to your debt can smooth out your cash flow. Often the majority of your payment goes to interest until it is paid completely off. However, multiple payments will be contributed to your principal amount owed instead.
Put the Credit Card Down
Credit cards are convenient, but they're a business. The goal of credit card companies is to make money from you. That means credit cards have extremely high-interest rates that can drag you down quickly. People also tend to spend more money when they don't physically handle cash.
Create a Budget
Making a budget can help you reduce spending, so you have more cash to contribute to your debt. Start by figuring out your monthly income and fixed expenses. Then, prioritize the remaining amount. It can be helpful to write down all your expenditures in a spreadsheet. You might be surprised how much you're spending on small purchases every month. Your budget will help you understand where to cut back.
Unfortunately, debt is part of most people's lives, but you don't have to let it take over. If you're proactive, you can be debt-free sooner.
