Debt is something many Americans struggle with and at times it can seem almost unavoidable. Between student loans, auto loans, and mortgages, many are already in debt as soon as they reach adulthood. Once you’re in debt, it can feel impossible to manage it and keep it from growing. Larger debts can leave you considering options like debt settlement, debt consolidation, or federal bankruptcy exemptions.
If your debt is weighing on you, one of the following tips might help you get debt-free faster.
Keep a list of all your debts
The first step to managing debt is having a good understanding of it. Writing all of your debts, how much they are, what they’re going towards, and what interest rate they have is a good way to start knowing what level of debt you’re in so you can be better equipt to handle it.
Figure out what debts to pay off first
Once you’ve figured out what all of your debts are and how much they are, it will be easier for you to figure out which debts to pay off first. While you might want to pay them all evenly, it might to in your best interest to pay some off in larger amounts, rather than make the minimum payments. For debts that come with higher interest rates, you should try to make larger payments to pay them off sooner to save money in the long run.
Pay your bill on time
Avoid late fees by paying off all your bills at the time they’re due. Paying bills on time prevents you from going even further into debt. Even if you are late on a payment, you should make it as soon as possible rather than waiting to make it up at the next payment date.
Make at least the minimum payment
Of course, you’d like to be putting more money towards your payments to get out of debt sooner, but we all know this isn’t always possible. Making the minimum payment might not be getting you out of debt quickly, but it will at least prevent your debt from growing.
Only makes purchases you can afford
If you have credit card debt, you probably already know how easily it can be to make credit card purchases without having the money to pay it off. Sometimes it’s necessary to do, but when you’re trying to get out of debt and going into the future, try to limit any credit card purchases unless you have the money to pay it off. You might want to give up your credit card altogether, but that can bring down your credit score even more. Continuing to make small charges you know can get paid off right away can help build your score back up.
Create a monthly budget
Set up a calendar of all your monthly payments so you know what’s due when. Planning out your payments ahead of time helps you get them paid on time and helps you budget for the future.
Save up an emergency fund
When you’re busy trying to pay off debt, it can be hard to think about putting money aside. Saving for an emergency fund can help prevent you from going further into debt going forward. If an emergency does come up, you have something you can fall back on, rather than having to take out money you don’t have.