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How Can I Reduce My Debt?
One of the most asked questions about about frugal
credit is "How can I reduce my debt". The article below gives you some
great suggestions on how you can start reducing your debt with just a
few dollars a week.
Pay Off Your Debt In Just A Few Years
Are you tired of watching your debt grow month after month? Do you
realize how much you are paying in interest over the years to the
companies you have credit cards with? We’ve all done it and sometimes it
feels like there’s just no way out of the credit trap. I’ll share how
you can start paying off your debt rather quickly by taking small steps
and sticking with the plan.
You can start out with as little as $20 per week, but I suggest you do
you best to come up with $200 a month extra to pay off your debt. You
will see results much faster that way. In a couple of weeks we’ll talk
more about simple ways to come up with a few hundred extra dollars per
month, but for now start with whatever amount you can afford. The
important thing is to get started.
Take out a sheet of paper and list all your current debt on there
including
- Credit Cards
- Store Credits
- Furniture bought on buy now pay later
- Car Loans
- Student Loans
- Mortgage
Now jot down how much you owe on each and how much interest you pay.
Your highest interest debt is probably going to be one of your credit
cards. That’s where we will start.
You are already making at least minimum payments to pay each of these
debts off. I want you to take that $200 and add it to your regular
payment toward your highest interest credit card. Let’s say you’ve been
paying $50 each month toward it so far. Now you are going to pay $250
each month – until it is paid off.
Here’s where it gets interesting…
Once your first card is paid off, take the entire $250 and add it to
what you are already paying on your second card. Let’s say you’ve been
paying $100 so far. You would now be paying $350. Once that card is paid
off you take the $350 and apply it towards paying off your next debt.
Let’s say your next debt is your $200 car payment.
How fast do you think you can pay your car off by adding an extra $350 a
month? And then you will have an extra $550 a month that could go
towards paying off your student loans or your mortgage.
Can you see how once you get the ball rolling the debt starts getting
paid off rather quickly?
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ABOUT
THE AUTHOR: For more information about
making a budget
and taking control of your personal finances visit
www.ourfamilybudget.com and join our free newsletter.
Recommended Frugal Reading
Living On A Dime is known as one of the very best resources of its kind to help you get out of debt without depriving yourself.
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