How much debt do you have? If you’re drowning in it, don’t worry. You can eliminate your debt today with these 6 simple steps!
1. Stop adding debt. You should never borrow more money than you can pay back immediately! Only purchase something if you already have the money for it, period. Rolling over installments will push back your debt-elimination date even further.
2. Eliminate nonessential expenses like cable TV or eating out all the time . Then, cut the fat in your budget. If you stop buying premium coffee every week, or stop taking cabs and start walking/taking public transit instead, you will save a ton of money very quickly.
3. Make more than the minimum payment on your credit card bills each month . This is usually pretty easy to accomplish if you keep up with #1. You can even call your credit card company and ask for a higher limit if you have been a good customer for a while. This will allow you to increase your available credit, which means more monthly debt payments!
4. If you have any extra money this month as the result of sticking with your budget or cutting out excess expenses, put it towards your debt.
5. If you own a home, consider refinancing to today’s low rates . This is particularly common among those with adjustable rate mortgages that have shot up in recent years as a result of the recession.
6. If you want to eliminate the vast majority of your debt very quickly, consolidate all of your debts into your lowest-interest loan. If you have a car, you might put the rest on a credit card . This works particularly well when you have already been paying off your credit card balances in full for several months, so the interest rate doesn’t add up to much over time.
Before long, you’ll be free from debt! But you should also consider making a budget that allows you to save for emergencies. After all, if too much money is sitting in your checking account, you might be tempted to borrow again!
You’ve got this. Now go eliminate debt!