Whether it’s a student loan, a car loan or a credit card, most people have some sort of debt hanging over their heads that they’d like to pay off. Take a moment and think about the debt you have. Maybe it’s a home loan or medical expenses. Maybe it’s debt you’ve carried through the holidays that you now need to start paying back. Whatever debt you have, make the resolution this year to tackle it head on! Here are some tips to help you manage your finances and pay off your outstanding debts:
- Know what you owe. Listing all of your debts out (along with associated interest rates) will help give you a better understanding of exactly how much money you owe, and might also shed a little light on how you got into debt in the first place. It will also help you prioritize your repayment plan of attack.
- Stop spending. If your credit card spending is out of control, stop using your cards immediately. Put together a monthly budget for yourself that will allow you to pay your bills without depending on credit.
- Stick to a budget. Budgeting is key to paying off your debt in a timely manner. Planning out your monthly expenses, trimming unnecessary costs wherever possible and holding yourself accountable for making your payments will allow you stay on track and eliminate that debt as quickly as possible.
- Attack high-interest debt first. Rank your debts in order from the highest to lowest interest rate. Concentrate on paying down your high-interest debt as quickly as possible; you will save money in the long run.
- Find out if a balance transfer is right for you. Transferring a credit card balance can sometimes be a helpful strategy to employ when you’re managing your debt. Card companies typically offer introductory offers of very low or zero-percent interest rates for several months, which can give you time to make payments without worrying about interest accruing faster than you can pay it off. When transferring a balance, be sure to always read the fine print before accepting an offer.
Making the decision to start paying off your debt is the easy part — putting it into practice requires thought, planning and discipline. If you find yourself still struggling to make payments, always be sure to contact your lender or card company before you miss a payment. In many cases, they will be willing to work with you to structure a repayment plan that works for you.
Learn more about how you can stay debt-free with these tips!