If you’re in debt, you’re certainly not alone! In fact, many people are in debt, whether that be credit card, mortgage, auto, or student loans. Rest assured, there is a way to get out of debt. You simply need to make a plan. There’s an old saying, failing to plan, is planning to fail. This is certainly true if you’re trying to erase debt without a solid plan in place.
According to experts, one of the very best ways to pay down debt is to start with the smallest debt owed and pay the most towards paying that debt off and then start on the next one. You’ll still need to make the minimum payments on the other debts, but whichever has the lowest balance, put more money towards getting rid of it.
Easier said than done, I get it. That is the reasoning behind having a plan. Let’s just take an example. Say you’re living beyond your means like so many currently are. Without knowing it, you’re spending $8 in the morning on coffee and breakfast treats. You’re spending $15-20 on lunch during the work day. More often than not, maybe you’re ordering take out for dinner. All of these add up to quite a bit of money and if you take the time to decipher where all of your money is going, you can see that if you were just to eliminate one or two of these expenses and put it towards some debt, you could get that debt paid off pretty quickly.
Surely you see on your statements that if you only make the minimum payment that it’ll take you xxx years to pay off… but if you start paying more, then you can pay it off much faster. Of course, budgeting isn’t for everyone, which will bring us to debt consolidation.
Basically, numbers don’t lie. If you have $5000, $10,000, or even more in various debts, then it’s likely a very good idea to consolidate all of that debt into one, lower interest rate loan. There are countless companies out there that offer these sort of plans. Yes, you’re credit score matters, but when you have credit card debt in the thousands at a 19+% interest rate, it’s well worth it to check out getting some sort of loan at a much lower rate and rolling all of your debts into one loan that you can concentrate on paying off each month.