Debt can be a scary topic to face.
Just looking at your debt can bring on feelings of fear, shame
Remember, your debt doesn't define you and not taking conscious action will just make things worse.
Here are a few tips to pay off your debt even faster.
Focus on High-Interest Debt First
Mortgage payments and car loans can be examples of low-interest debt, meaning you don't accrue as many interest fees.
So, its best to not focus on putting extra money towards these low-interest debts each month. Instead, focus on your high-interest credit cards or high-interest personal loan debt first.
Some of these high-interest debts can be in the 16-24% APR range. To put it into perspective, a car loan can be as low as 3-4% APR.
The quicker you get your high-interest debt paid down, the better.
Cut up your
High Interest Credit Cards so you Don’t Keep Using Them
This may seem simple, but stop using your credit cards that you are unable to pay the balances off in full.
By cutting these high interest, high balance cards up you won’t be tempted to use them when you finally do get them paid down some.
Don’t worry about canceling these cards, as this can often times negatively affect your credit. Just focus on paying them down and never using them again!
Get a Side Gig to Bring More Money In
If you are in a position where you are living paycheck to paycheck or find it difficult to put more than the minimum payment towards your
It's simple, you either need to cut back on expenses, or increase your income.
Now a days, we live in a world where there are so many options for side hustles to make some extra cash. Things like ride share apps (Lyft or Uber) make bringing in extra cash super simple.
You could also look into turning a side passion, like photography or graphic design, into a
Forgo a Luxury to put the Money Towards your High-Interest Debt
We know this one doesn’t sound like a barrel ‘o fun, but we promise it isn’t as bad as it sounds. Especially if the end game is paying off debt!
Take an inventory of all the things that you may currently consider a luxury that you are spending money on each month.
Then prioritize them in the order of importance to you. We created an example below to bring this one to life. Number one being the most important and number 8 being the least.
- Daily Starbucks or other coffee pick me up. ($140.00 a month)
- Eating lunch out 2-3 times a week. ($120 a month)
- Monthly manicure ($120 a month)
- Netflix. ($15 a month)
- Hulu. ($10 a month)
- Delivery services. ($50 a month)
- Eating out dinner twice a weekend. ($400 a month)
- Cable. ($150 a month)
As you can see in our example, eating out twice a week and cable are of lower importance to us,
If we do away with those two items we could be putting that amount towards paying down debt.
Borrow a friends Netflix login for a little bit, or instead of watching cable, focus on reading more in your spare time, or listening to podcasts instead. You'll be smarter for it.
HOT TIP: Sometimes it’s a good idea to double check your bank account to see what recurring subscriptions you are being charged for each month.
You may be getting charged for something you never use or even forgot you still had access too. Cancel these items and start putting that money back into your pocket!