Pay Off Your Debt — Without Too Much Stress!
Looking for ways to pay off your debt without it becoming another huge stressor in your life? Many of us have all sorts of debt we’re dealing with: credit card debt, student loans, car payments, mortgages, and it’s hard to get ahead. Here are a few ways that might help.
Get it in writing
You can use an Excel spreadsheet, a typewriter or good ol’ pen and paper. Heck, use a glitter marker, for all we care.
However you do it, you need to write down each and every debt you owe along with its minimum payment and interest rate. If you have a credit card with a promotional rate or a mortgage with an adjustable rate, make a note of when those will change.
Your list should include all of the following, if you have them:
- Credit cards.
- Home equity loans.
- Vehicle loans.
- Student loans.
- Personal loans.
- Loans from family members.
- Payment plans for the doctor, veterinarian, mechanic, etc.
- 401(k) loans.
Once you have all the debts written down, total them up. That number may have you thinking either OMG, or “Hey, that’s not too bad.”
Regardless of your reaction, now it’s time to bring that number down to zero.
Create your debt repayment plan
This is much easier than it sounds. While you can use calculators and spreadsheets, there’s no reason to get that involved, unless you really dig that sort of thing.
If you’re not a budget geek, you can instantly create a debt repayment plan by going back through your list (you know, the one you created in Step 1) and numbering the debts in the order you’d like them gone.
There are two theories when it comes to ordering debts.
- Theory 1. Order the debts by interest rate, starting with the highest rate and working your way down. This method may save the most money overall.
- Theory 2. Order the debts by their balance, starting with the smallest balance and working your way up. This method may help you quickly see progress and stay motivated.
My personal preference is theory No. 2, although if I had a debt with a significantly higher interest rate than everything else, I might consider paying that one off first.
– via Money Talks News
Paying Off Your Debt The Easy Way
When it comes to paying off your debt, it seems like everyone has an opinion. But what really works? If you’re looking for simple solutions to put in place, to help you live a more debt-free existence, we can help.
Lower your fixed expenses.
Reining in discretionary spending for a few months goes a long way toward tackling debt. But if that’s not enough, try to reduce your fixed expenses.
Take steps to lower your household bills; refinance your mortgage to get a lower interest rate; or, if you have a good payment history, ask your credit card company to lower the interest rate you’re charged.
Try to boost your income.
Consider whether there’s any way to boost your take-home pay.
If you get a big tax refund every year, that means you’re having too much withheld from your paycheck. If that’s the case, you can reduce your withholding by changing your W-4 at work.
– via CNNMoney
How do you plan to pay off your debt and save money?