Give Debt The Heave With These Tips
When it comes to kicking debt to the kerb, it is all too easy to just bury your head in the sand and hope that it goes away. The fact is, debt doesn’t leave you or your credit record. The best thing you can do is face up to it as soon as possible. It can feel overwhelming, be a huge cause of stress and have an impact on your daily life – and that is aside from the fact your home or car may be at risk too. There are people out there who have recovered from a mountain of debt, using these easy to follow steps.
Take steps to get rid of Debt
The first step is to add it all up. Go through all of the lines of credit that you have and what you owe and where. Put them in order of the highest debt to the lowest and begin to form some type of action plan in your mind. Work out a budget.
What can you honestly afford each month? If it that case that the debts that you owe far outweigh what you have available it might be time to consider debtconsolidation.loans, lumping everything into a single payment is a lot easier for many people.
Some Debt costs more than others
When it comes to debt, there are some that cost far more than others. Short term payday loans and credit cards charge the most, they have a higher interest rate, and minimum payments won’t begin to clear the debt. Instead, you’re covering the interest accrued and the fees. Nightmare. So focus on pay as much as you can here.
You’ll be looking to use around 20% of your income. If you have multiple credit card debts, you’re going to look into which method of clearing the debt you prefer.
Decide which method to use
Method one is paying the smallest balance off first. People refer to this as the Snowball method. Once you have paid off some smaller debts, you are freeing up more money to take down the more substantial debts.
Method two is a little different. You start by paying off the debt with the highest interest first. By doing this, you are going to be minimising the total amount of interest you will pay over the life of the debt and then start taking chunks out of the actual debt amount. This is known as the Avalanche method.
Save a small amount each week
At the same time as paying as much off as possible, it is advisable to save a small amount of money each week. To do this, you can look into automatic saving apps. They round up what you spend daily and put the excess into an account. For example, if you pay 8.45 in a store, the surplus that makes up to ten dollars will go to a separate account. Brilliant.
In most cases, you can call and negotiate a rate that is better suited to your circumstances, rather than the given payment amount. In all cases, you should seek advice and support from a debt helpline and check out forums online to get support from others in the same situation.
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