Breaking Up With Debt
You’ve recently graduated college, bought a home, or a new car, it’s an exciting time for you, but now you are faced with some debt. You may now have the constant thought in the back of your mind on when and how you are going to pay off your college loans, car loans, or credit card. No one wants to be in debt, however, the average American has $38,000 in personal debt and that’s excluding mortgages. Start breaking up with your debt with these tips.
Pay Off the One with the Highest Rate First.
The higher the interest rate, the more you will be paying. Try to pay off this loan first. The more you can put towards the principle payment the quicker it will shrink. Don’t let that interest creep up on you.
Pay More Than The Minimum Balance.
Paying slightly more than your monthly payment, even by just a few dollars can help reduce your debt quicker. Skip your midday coffee a couple of times that month and you’ll have the extra money to put towards your payment.
Cut Back On Your Spending, Especially With Credit Cards.
It’s important to cut back on your spending so that you have money available to pay off your loans. Instead of using a credit card, that can charge you interest rates if you don’t pay it back in time, carry a small amount of cash with you to make your purchases. It’s a lot easier to just swipe your card, but it makes it more tangible to see the amount of money you are able to spend.
Remove Your Saved Cards From Online Shopping Sites.
Going along with reducing your credit card usage, remove your saved credit cards from any online shopping site that you like to use frequently. It will help reduce the amount you purchase if you can’t easily click a button to order now. It will make you think twice about putting that next purchase on your card.
Earn Some Extra Money.
Sell your unwanted or unused clothing, electronics, or household items to earn a little extra cash to put towards your monthly payments. Added bonus, it will also declutter your home.
When it comes to paying off debt there is no quick fix. Try not to get discouraged. Be proactive and take control of your finances again. Pioneer’s Personal Finance can help you track your progress to help you better understand and eliminate your debt.
Disclaimer: The contents of this document are not intended to be, and are not, legal or tax advice. The applicable tax law is complex, the penalties for non-compliance are severe, and the applicable tax law of your state may differ from federal tax law. Therefore, you should consult your tax and legal advisers regarding your specific situation.