Tips for Paying off Debt

Feeling overwhelmed by your debt? Here are 5 tips to get you on the right track.

Stop Spending Money

Just about every financial blog on the Internet will tell you the same thing. Stop acquiring new debt. Stop using your credit card. Stop going out. Stop ALL unnecessary expenditure.

Make A Budget

Sit down and put together a monthly budget for all your necessary expenses. Look for areas where you can cut or spend less, such as groceries or entertainment. Compare your budget against your monthly income, and plan to put any extra cash into savings.

If you’re still in need of extra cash, don’t be afraid to get a little thrifty. Take a look around your house and see what possessions you can do without. Go through your attic, basement, or storage closet and sell off any unused or unneeded items on eBay. Also, use the Internet! You can find a ton of resources to help you find fast cash.

Figure Out What You Owe and Prioritize

Structure and consistency are critical to paying off your debt, and you need to prioritize. Our friends at Nerdwallet say you should separate your debt into these categories:

  • Consumer Debt : Your credit cards, medical bills, pay day loans, and personal loans. These should be your top priority.
  • Education Debt: Your student loans.
  • Auto Loans
  • Mortgage Debt
  • Collections

Set Up a Payment Plan

Most banks offer some sort of automatic bill pay. Set it up so that you’re making payments every pay period on a consistent schedule.

If that doesn’t work, set up your own payment schedule. The key is to pay something every month, especially towards your most crucial debt.

Also, where you can, pay more than the minimum balance. It’ll only help you get out of debt faster.

Stay the Course

Paying down debt requires patience and discipline. Making the necessary sacrifices to become debt free is not always easy, and you simply won’t find relief overnight. Just remember, if you stick to your budget, pay on time, and resist the urge to spend, it will all pay off (literally) in the long run–and for the better.

And if you need help staying on track, consider using your smartphone to help! There are some fantastic apps that can help you manage your payments and keep you focused on your goal. Just follow this link to check them out.