Debt is something most of us have dealt with or will have to deal with at some point in our lives. As much as we may try to avoid it, the truth is, things happen that we aren’t always prepared for. Expensive car repairs, medical bills, and other expenses that life throws at us from time to time can really derail us financially, causing us to go into debt. Bigger purchases, such as a car or even a piece of Atlanta real estate, can cause major setbacks if not properly budgeted and planned.
A major source of debt for many Americans are student loans. For the average person, it can be almost impossible to go to college without taking out some sort of loan, leaving many young people feeling desperate and paying back thousands of dollars for years after they graduate.
Regardless of the source of your debt, there are a few things you can do to reduce your debt and work towards paying it all off. Here are five ways to pay off your debt quickly and put your financial status back where you want it to be.
Make a budget
Before you start working towards paying off your debt, it is important that you have a thorough understanding of your bills and how much you owe on each one. It can be easy to look at a stack of past due notices and immediately feel overwhelmed, but spending some time going through each and every bill and breaking down how much money you owe will help you look at your debt with a clear head. It can be helpful to physically map out a budget on a piece of paper and keep it taped to your refrigerator or near your bed, that way you will never lose track of what you need to pay off and how much progress you’ve made.
Pay more than the minimum
When you get a bill in the mail, your first instinct may be to simply pay the minimum balance for that month. However, you can pay off your debt faster by paying more than the minimum, even if it’s not by much. By paying off more than the minimum, you could save yourself hundreds or even thousands of dollars in the long run. Take a look at your budget and assess how much more you are able to pay on your bills that month to ensure that you don’t go over your personal spending allowance. Something as small as paying a few extra dollars on your bills each month can chip away at your debt and help you pay it off faster.
Use cash whenever possible
When you’re swiping your credit card, it can be easy to forget that you’re spending actual money that you will have to pay back soon. Instead of reaching for the plastic, try to pay for things in cash whenever possible. Paying in cash will help you keep track of what you’re actually spending, and you will be able to put things into perspective when making frivolous purchases. It can also be helpful to only allow yourself to leave the house with a set amount of cash to avoid impulse purchases. Using cash instead of a credit card can make a big difference in your overall financial health and paying off your debt quickly.