While the act of accumulating debt can actually be quite easy, it is ridding ourselves of this bad debt that proves to be a much more challenging task. Even if you are aware of ways that can help pay down your debts, it is possible that maybe you are finding it is taking a lot longer than you thought and therefore you want and you NEED to be able to speed up this process. I really want to get on track for planning a debt-free 2015 & I need somewhere to start.
Setting a goal for when you want to accomplish this task is always a good place to start. Whether your time line for reducing your debt is a within a few months from now or in a year’s time – either way it is good to devise a plan for how you will make this happen, in order to meet your deadline. For me personally, I am setting a goal of paying down a lot of my debt by New Years Eve of this year and as a result, this means I will need to act quickly and remain dedicated to seeing it through.
As a part of your debt-reduction plan, there are some payment strategies that will help you pay down your debt as soon as possible. Here are 5 steps that I plan to follow so that I can start 2015 off on the right foot and lower my debt with significant results.
1. Paying more than the Minimum
Credit card debt being a likely culprit of debt accumulation, then it may also be likely that in some cases, you have been making the monthly minimum payment only. While sometimes we get into a rut and can only pay the minimum, this can mean that our debt is actually continuing to grow as we are only paying off the interest – not the actually balance, itself. In order to make a difference and pay down an even larger amount of your debt, you will want to continue to pay off more than the minimum balance each time. All in all, paying off as much as you can afford each month can help get you on your way to getting rid of some of your debts by the time 2015 rolls around.
2. Paying off your Most Expensive Debt First
This strategy can definitely help to speed up your debt-paying behaviours. Much like the first step, if you are paying more than the mimimim balance on one debt, then it is a good idea to choose the one the highest balance. It may not be realistic to make higher payments on all of your debts, so using this strategy and paying the most expensive of your debt concerns first, can also advance your debt-relief plan. If you have one credit card, for example that has the highest interest rate, then it may be best to identify this one as the one you will devote extra money, until you have reduced your debt significantly. By following this method, you may be surprised how much you can lower your debt load by, and in only a couple months too.
3. Reducing your Spending
This third step, I found can be used each and every time you reach for your wallet to make a purchase. While you may go out shopping with a purpose in mind and items you need to buy, however there are various ways you can choose to cut back on the amount you spend. You can watch for sales and discounts, choose generic brands over ‘fancy’ brand names, and even choose not to purchase items that are unnecessary. Ultimately, opting to spend less than you plan to spend can be a strategy to put into practice each time you go to the store. Whichever approach you choose to reduce the amount of money you are spending, what you can do to improve your chances is to remove yourself from a situation where you may overspend or spend for the sake of spending. We all get the urge to spend too much money from time to time, and this step actually takes this a step further and suggests that you don’t just overspend – you underspend. If you can reduce your daily and weekly spending, you can avoid adding to your debt and instead can focus on making it disappear.
4. Getting a Second Job
If you find you are needing a boost of income to help pay down your debt, sometimes this may require that you look for a second job. If this is an option for you, it can really help with paying down your bills and working toward your goal of improving your finances in 2015. This time of year may also be an opportune time to find some work, as many stores and businesses often look for extra help during the busy holiday shopping season. While this may option may only act as temporary work, it can still help you to afford to pay off some additional debt at a time when you need it the most. Taking on some extra work, albeit only for a short period of time can help you to rid yourself of a good chunk of your debts even prior to the New Year.
5. Speaking with a Debt-Relief Specialist
This final step can also be an effective method of getting the proper debt-relief plan in place before the New Year. A debt-relief counsellor can advise you on which specific strategy may help you the most. Some of these strategies may include, taking out a debt consolidation loan at a lower interest rate or refinancing your mortgage through an equity loan – both of which, if are most appropriate for you current situation can definitely help you reduce your debt in less time than before. These strategies will also be most effective if you stick to your budget and work at spending less and paying off more.
Like me, you also probably have realized that the sooner you start dealing with your debt, the sooner you will be able to pay it off. While you are at it, you can revise your budget for 2015 and continue moving ahead with your debt-relief plan. If it is your hope to get to a place where you are free of all bad debt woes, you can give these strategies a try and keep your finances steady going well into the New Year, meanwhile you will also have a lot more to celebrate this New Year’s Eve.
