Does it seem like debt is starting to pile up? Accumulating debt can cause stress, interest can add up and it can be financially exhausting. You can budget, make financial cuts, and work an extra job to start savings but without an achievable strategy to pay it off, it will take you longer to get your financial freedom.
Let’s start with what you owe. Use a spreadsheet and list all your debt, minimum payments, interest rates, and due dates. By listing it all in front of you, you can get a clear picture of what you are working with. You will also want to note which loans have any pre-payment penalties as well. Some loans could penalize you if you pay it off before the term ends. By laying out all our debt into one document, you can look for ways to tackle it and figure out which strategy works best for you.
There are a few strategies that you can use to help you pay down faster.
Option one: Pay more than the minimum. Even a small amount over your minimum payment can make a big difference. When you can, add an extra $20-$50 dollars to your minimum payment and see how much faster you can relieve your debt. By doing this, you also cut down on your interest payments.
Option two: If you’re juggling multiple debts, like credit cards, student loans, or car loans, it can feel very overwhelming. A smart strategy is to focus on paying off one debt at a time, while still making the minimum payments on all the others. Choose one loan to put extra money toward each month. You can either start with the smallest balance (for quick wins) or the one with the highest interest rate (to save more in the long run). Whichever method you choose, stay consistent and put any extra money you can toward that focused debt until it’s paid off. Then, move on to the next one.
Option three: One of the easiest ways to stay on top of your debt is to automate your payments. This ensures you never miss a due date, which helps protect your credit score and avoids costly late fees. Set up automatic payments for at least the minimum amount due on each loan and mark those dates on your calendar so you know when the money will come out. Consistently paying on time, even if it’s just the minimum, can help improve your credit score over time and be free from debt.
Paying back debt can be tricky, especially if you are not organized. Spend your money wisely and make every payment count. Don’t get discouraged if you can’t add extra to the monthly payment. Just stay consistent, stay motivated, and watch your debt shrink down faster. You are not alone!
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