How to Make This the Year You Pay off All Your Debt
Friday, January 24, 2020, 6:00 AM | Leave Comment
Wouldn’t it be great if this becomes the year you pay off all your debt? There’s no reason to wish this would happen.
There are specific strategies you can take to make it finally get it done.
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Pay More Than Your Minimum Payments
You might be in a rut where all you do is send the minimum payments every month. This is a bad habit because it will keep you in debt for a very long time. The reason is that you are mostly paying interest only.
Make it a goal to start adding money to those minimum payments. One way to do it is to double the minimum.
If a credit card wants $50, send them $100 instead. Figure out a way to find the extra money.
Here are some ideas:
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Stop buying lunches
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Don’t go to happy hour
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Skip desserts
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Use the Snowball Method
Gather all your debts and find the one with the smallest balance. Decide how much more you’ll pay over the minimum to accelerate its payoff date. Pay the minimums on other credit cards. After the first debt is gone, take the entire amount you used to send to it and add that to the minimum payment of the debt with the next lowest balance.
This is the snowball method because it snowballs the amount getting paid to each card. When that second debt is gone, add that entire amount over to the third debt. Keep doing this and you’ll soon be paying an amazing amount every month to larger debts that used to feel impossible to pay down.
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Transfer to Low Interest Rate Cards
Try transferring high-interest debt over to low-interest debt. It simply makes sense to get 24% debt onto a 7% card instead. You’ll save a lot of money in the monthly interest charges.
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Sell Unneeded Items
Take an inventory of everything around your house that you don’t need or use anymore. Start selling these things off and use the money to pay down your debt.
Do you have an old junk car sitting in the driveway? Create an ad that says, buy my junk car, and get rid of it. Do you have furniture you don’t want? Sell it. Find as many items as possible and get rid of them.
It’s not too hard to pay off all your debt. Get focused and start attacking it with the above ideas.
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