by Susan Paige
Paying off debt is that haunting and overwhelming task that many Americans struggle with.
Of course, a small balance on one credit card is nothing to be concerned about. But, if you have more than a few credit cards with high balances, you are swimming in a pool of debt that probably seems impossible to get out of.
Don’t worry, you’re not the only one that feels this. That’s why we’ve put together this guide to help you learn how to pay off debt effectively and efficiently. So, take a deep breath and keep reading to learn more about what you can do to become debt-free once and for all.
The Secrets to Paying off Debt
There is no one secret to getting out of debt. You will need a good attitude and motivation to persist and see results. Take a look at some of these suggestions that can help you organize your payoff strategy and finally find financial freedom.
1. Change Your Spending Habits
The first thing you need to do before you can start tackling your debt is to watch your spending. It’s too easy to throw gas and groceries on the credit card each month to earn rewards points or just for easy budgeting. But, be careful because it’s even easier to overspend.
If you’re not keeping a steady budget for these types of expenses, it quickly turns into more debt.
2. Quit Spending on Credit Cards
With that said, you should quit spending on credit cards altogether. Use cash instead. Make sure you delete credit card information from online stores and auto-populated fields for websites that you frequent.
If you have auto-payments set up on your credit card, rearrange those payments to withdraw from your bank account while you’re working to pay off the debt. You should never add to your balance while you’re paying it down.
3. Create a Budget
Of course, you can’t manage your spending on or off your credit cards if you don’t create a stable budget. Your budget will vary according to the types of expenses you have, including the different types of SR22 insurance and associated costs.
Even if you don’t have such extenuating circumstances, you’ll need to have a proper outline of what your spending should look like each month. Then, you can accommodate your debt accordingly.
4. Use Balance Transfer Offers
One of the best ways to pay off credit cards is to use a balance transfer option from just one of your credit cards. Many credit card companies provide balance transfer offers to their loyal customers as a way to earn business. Sometimes, they even offer zero interest for a period of time so you can pay off the balances easier.
If you don’t have a balance transfer offer, look at alternative credit cards for the option. Shop around until you find the best balance transfer fees and rates.
5. Always Pay More Than the Minimum Due
It may seem like a no brainer, but it’s not always easy. Even if it’s only $5 more than your minimum payment due, make sure to pay an additional amount above and beyond each month. Remember, the minimum payment only pays down about 65% of your balance.
Work it into your budget to pay each card a little more each month, and you’ll soon notice that your balances are actually moving.
6. Pay off Higher Balances First
When paying off credit card debt, it’s also important to work on the higher balances first. This is because these are the balances that are costing you the most money in the long run with interest charges. Even if you’re just chipping away at the balance, use these methods for paying off debt and keep chipping until it’s gone.
7. Put Extra Income Toward Debt
It may be tempting to use additional income for other expenses, but that won’t get the job done. For every extra dollar you earn above those amounts specified in your monthly budget, you should save at least eighty-five cents and put it toward your debt. It would also be wise to actually save the other fifteen cents in your savings account.
It may not seem like much, but in the case of debt, it’s no myth that every single penny counts!
8. Have a Yard/Garage Sale
Many people live by the credit card pay off mantra of downsizing their lives, selling their things, and achieving financial freedom. You might be surprised by the items you have laying around your home and hidden in your garage or attic that you’ve never used or never will. And all of these things are worth something to someone else.
So, have a yard sale and get rid of your stuff! Take the proceeds to pay down debt and live a little lighter, both financially and emotionally.
9. Get a Second Job
Debt is overwhelming, and oftentimes our standard jobs are just enough to pay the regular bills and put food on the table. Sometimes there’s a little left for fun. So, how are you supposed to find the money to pay off your debt?
Do what your parents always told you to do and get a job. Another one, that is. Remember, it’s only temporary, and you’ll be overjoyed when your debt is gone and the job is a mere memory.
10. Reward Yourself at Milestones
Finally, don’t hesitate to reward yourself when you reach milestones in your debt payoff goals. For every one thousand dollars paid off or each credit card gone, take yourself out to dinner or buy a new pair of shoes. It will serve as a good reminder that you’re doing something good for yourself in the end and overall.
The Best Way to Pay off Credit Card Debt
There are various methods for paying off debt if you know where to start. We hope this post helps you get pointed in the right direction so that you can pay your debt off in a timely and affordable fashion.
Don’t forget to check back for more posts about the topics that are most important to you and your financial lifestyle.