Debt is becoming a crushing reality for many Americans. Brice Capital has put together the following eight ways to tackle debt so you can pay it off and return to the life you want. Most of your financial stress will be left behind. Print out this list and work from it so you can pay off your debt faster.
1. Gather All Your Information
Before you get started, debt consolidation expert Brice Capital advises you to gather all of your information into one place. It’s important to have an overview of your entire financial situation. You’ll need the following information:
– An audit of your recent credit score to see if you can lower your interest rate or apply for a debt consolidation loan.
– A copy of your credit report so you can take note of all of your debts.
– Statements for both your credit cards and loans.
– A bank statement from any financial institutions you use.
2. Document All of Your Debts
With this information in hand, you should write an extensive list of all of your debts, according to Brice Capital. Not only should you document the amount of debt, but you should also include the balance, creditor’s name, interest rate, and monthly minimum payment. This should help you determine how much you owe within the next three years or whatever timeframe you choose. You also want to include your family loans, groceries, medical bills, and utility bills, as these are unavoidable costs that should be taken into consideration.
Get several copies of your paystubs so you can calculate your monthly take-home pay. This amount helps you determine how much you can pay towards your debt, groceries, and other bills. This also helps you decide whether you need to make more money or spend less money.
3. Focus on Lowering Your Interest Rate
Interest rates can make it impossible to make progress on your debts. The higher the amount, the higher your interest rate will be. If you have an overwhelming amount of credit card or loan debt, then you might consider applying for a credit card or loan with a lower interest rate. If you own a home and can use it as equity, then this may earn you an even lower interest rate if you’re able to stomach the risk of using your home to secure a loan. If your credit cards and loans have you floating around in debt, then you may consider consolidating them. These methods all carry inherent risk, so you should research your options before making any decision.
4. Pay More than the Monthly Minimum
It’s always better to pay more than the monthly minimum payment if you’re able to. One benefit is that you’ll pay it off sooner than expected. When you’re making these payments, you should make sure that it’s going towards the principal rather than just the interest. You can use this method for paying off a car loan, mortgage, or any line of credit. You should also verify that your particular loan does not charge a pre-payment penalty. These are sometimes built into loans with a set repayment period to ensure the lender makes their profit.
5. Make More Money
One way to get out of debt is to make more money. That doesn’t mean you have to search for a new job or ask for a promotion, however, that wouldn’t hurt. It also means working on a side gig or finding another way to make extra money on the side. Maybe you can offer to babysit or walk dogs for a few extra dollars. Other options include investing your spare change, working odd jobs, and taking online surveys.
6. Spend Less Money
Alternatively, you could spend less money if you need to. Usually it’s better to both spend less and make more. There are several ways that you can save money such as choosing not to buy coffee at the cafe every morning or bringing your own snacks to the movie theater. That extra money can go towards tackling your debt.
7. Create a Budget
Now it’s time to come up with a budget. A budget is a plan that can help you pay off debt in less time. It gives you an idea of where most of your money is going and what you should put it towards. There are several banks and credit unions that offer free budgeting plans. With a well thought out budget you can better allocate money throughout the month without having to guesstimate.
8. Make Adjustments to Your Plan
Once you’ve come up with a budget and debt pay-off plan, you don’t want to get lazy with it. Keep an eye on your spending habits to ensure that you’re on top of your goals. You don’t want to get off track and fall back into some of your regular habits. You should also tweak your plan as needed. Review your budget every week or month and make adjustments as needed so you can set the course until your debt is finally paid off.
Tackling your debt is manageable. Don’t worry if you have to make adjustments or if you have a setback. It’s not about how much debt you paid off, it’s about the progress you’ve made. You’re taking control of your debt and changing your lifestyle so you can achieve financial success.