Unfortunately, debt is a very common problem, despite its taboo nature. It also unnervingly affects almost everyone. It is all too easy to slip into debt, and far more difficult to crawl back out of it. When faced with such a challenge, it is easy to feel overwhelmed and unable to see a starting point, let alone an ending. But with these simple tips, getting out of debt can be less daunting and seem more achievable.
1. Pay More than the Minimum Payment on a Credit Card
Banks will offer a minimum payment from the moment you start borrowing money on a credit card, around a typical percentage of APR (Annual Percentage Rate) – the rate at which you pay interest on the amount of money borrowed. While paying off a credit card around a typical APR is better than nothing, it also takes a long time, all while accumulating more debt via interest. The fastest and easiest way of getting out of debt is to always pay more than the minimum payment every month. This helps save on interest but also speeds up paying off the debt.
2. Budgeting and Paying Off Debt
There are plenty of options when it comes to budgeting, but maybe the most effective at getting out of debt would be a strategy called the Bare Bones Budget. This strategy can go a long way in assisting the relief of debt. Obviously, paying off debt is the solution to debt, but where will this extra money come from? In order to have extra money to go towards paying off debts, it is important to cut down on spending. This is where the bare bones budgeting comes in, a strategy that allows for all important and essential expenses to be laid out without any room for ‘wants’. It is essentially a survival budget, the expenses you need to live.
Even when having a survival budget, there are some things that pop up. Maybe the kettle has broken, or the children need some new school shoes? Coupons for big stores such as Macy’s can assist in getting those extra costs down. You can find Macys coupons easily online, and as they are updated frequently, you should be able to find exactly what you need. Alongside the bare bones budget, you can save money on urgent necessities and successfully start to save money to put towards your debt. The fastest and easiest way of getting out of debt is to always pay more than the minimum payment every month. This method also works for paying off a title loan.
3. Use the Debt Snowball Method to Pay Off Debt
The debt snowball method is simply a debt reduction strategy, encouraging debt to be paid off from the smallest debt to largest debt. This gathers a ‘snowball like’ momentum, which means when the initial smallest debt is paid off, the money that was used to eradicate that will then be snowballed on to the next smallest debt, and so on so forth.
Essentially, all minimum payments should be paid on all debts, but for the smallest debt, the payment should exceed the minimum. Try to pay off as much as can be given in order to pay off the debt as fast and efficiently as possible.