Tips to Manage and Pay Down Your Debt Faster
Millions of Americans are struggling to overcome personal debts, which can have a ripple effect in many other facets of their lives. From meeting monthly bills to dream vacations to homeownership, debt can stall many life goals.
“Credit card debt and student loans plague people from all walks of life,” said Michael Sullivan, a personal finance consultant with Take Charge America, a national nonprofit credit counseling and debt management agency. “It’s easy to find excuses for tackling the debt, or to simply live in denial. However, the sooner the debt is dealt with, the better. A structured plan of attack and professional assistance can potentially save thousands of dollars in the long run.”
If you’re among the determined individuals who aim to overcome their debt in 2018, there are numerous options and resources you can take advantage of. Sullivan suggests the following:
- Create a Budget & Plan: Budgets are essential – no matter your debt level. To start, track all of your income and expenses for one month. Use that information to categorize all of your expenses, including debt payments. You’ll likely be surprised to find many areas where you can cut expenses and shift the funds toward paying down debt faster.
- Get a Second Gig: In today’s “gig economy,” it’s easy to pick up a second gig on your own schedule. Ride services, food delivery and even errand services make it easy and convenient to make an extra buck to put toward debt.
- Consider a Balance Transfer: It could be advantageous to transfer a balance from a high interest credit card to one with a lower interest rate. However, first see if any fees could offset the benefit, and determine whether you can pay off the balance before any lower promotional rates end.
- Negotiate with Your Creditors: A lower interest rate could help you pay down your debt faster. You can call your credit card company and ask for a lower rate if you have a positive credit history. Be prepared to state your case. Perhaps you have been a loyal customer, or a competitive creditor is offering lower rates?
- Talk to a Nonprofit Credit Counselor: If you need help creating a budget and plan to pay off debt, a nonprofit credit counselor can help – for free. Confidential credit counseling sessions can be completed online or over the phone. According to your budget and individual life circumstances, you will be presented with the best options for getting out of debt, and you will gain tools and knowledge to create financial independence.
- Evaluate Your Student Loan Repayment Plan: When was the last time you reviewed your student loan repayment plan? As your life circumstances shift, your plan may too. Maybe you need an income-driven plan, or perhaps it’s better to consolidate multiple loans. A student loan counselor can help you decide what’s ideal.