Was it your New Year’s Resolution to be debt free by the end of the year? It’s a popular and highly ambitious goal, and with the right mindset, you’re sure to achieve it. Here are some easy tricks to chip away at that debt month after month, without having to significantly alter your lifestyle habits.
- Pay more than your minimum payment.
By paying only the minimum every month, you’ll be spending excessive amounts of interest over the years, while prolonging the length of your debt considerably. It’s ideal to pay more than your minimum payment each month if you wish to conquer your debt efficiently. Start by paying 50 percent more than the minimum each month and gauge how that feels for your finances. Once that becomes easy, you can pay twice as much as your minimum payment, gradually increasing the amount until there is no wiggle room left in your budget.
- Don’t neglect one debt to focus on another.
If you’re in debt to numerous different institutions, you need to place equal emphasis on all, rather than neglecting one debt to prioritize another. While the amount you pay to each institution each month will depend on how much you owe, you need tto ensure to pay all debts consistently, or you’ll risk defaulting on a loan and damaging your credit.
- Set up automatic deductions.
Bills seem to all pile up at once, and it can be easy to find excuses to postpone making payments. By scheduling automatic deductions, it will be one less thing to think about, and it will force you to prioritize your debts over other monthly purchases. Only set up automatic deductions if you’re are confident you’ll always have enough money in your account to cover the payments. By over-drafting your account, you’ll be subject to additional fees, which will only make your money problems worse.
- Give yourself an incentive to get out of debt.
For children, one way to ingrain in them the importance of household chores is to offer incentives that encourage participation. For instance, for every chore completed, they get a piece of candy or a small sum of money. Believe it or not, adults are motivated in a similar fashion, and offering yourself a small reward every time you pay your bills can help to keep you on track with your payments. Consider creating a jar that you’ll contribute a set amount of money to every time you make a monthly payment on a debt. Once all debts are completely paid off, you can take the leftover money and splurge!
- Assess your budget and find ways to scale back.
The most effective tactic for getting out of debt relies on shifting your budget around. Find areas in your budget with some excess wiggle room, and tighten up that portion of the budget to create more money for paying off debt each month. Household supplies and food budgets are one of the areas people are most likely to overspend. Find ways to reduce these payments each month, so you can scrape together an extra hundred dollars or so to pay off debts.
About 80 percent of the U.S. population reports being in debt, and for many, that debt is a looming source of stress that makes it hard to be at ease. By implementing these tricks, you can gradually chip away at your debt, while improving your credit score. At DollarDays, we sell all of the household supplies you need at a fraction of the cost of retail stores. You’ll be able to slash household spending without changing your lifestyle habits, enabling you to pay off your debts a bit quicker. Click here to start browsing.