You know the routine: you work hard to pay a credit card off, only to add a few “little” charges here and there until you’re back where you started. It’s like some bad financial version of the film Groundhog Day. If this sounds like what you’ve been living, it’s high time to break the cycle of debt.
Here are a few ways to do just that.
Create A Spending Plan
While you always make sure you have enough to cover your monthly obligations, you pay little attention to how you spend the rest of your money, ordering out whenever you please for example, or buying online with abandon. This way of life leaves you vulnerable to unexpected expenses and overspending. Start accounting for every dollar, leaving just enough room for small rewards and things to enjoy.
Start A Savings Account
Do not make the mistake of concentrating on paying down debt without socking away funds, because you know what usually happens: an emergency crops up and you’ll find yourself deeper in debt. It’s essential hold on to at least $1,000 or two in a liquid account, just in case.
Choose The Right Repayment Plan For You
You have several options for credit card debt relief, including working on paying off the card with the highest interest first. You can also pay off the one with the lowest balance first. Which strategy is best? The one that keeps you motivated to stay the course to a debt-free life. Paying off the plastic with the highest interest rate first will save you the most cash overall but may not excite you as much as the “quick win” of eradicating the smallest balance first. It’s up to you.
Just be certain to reward yourself for meeting milestones when you are amid a push to pay off debt. Then recommit yourself to your plan.
Remember: Cash Is King
The best way to stick to your budget is to use cash for all your spending. When the cash runs out, the spending stops. Watching your wad diminish as days go by is a reminder that your years of compiling debt are over. Forking over cash each time you buy something also helps you evaluate whether what you’re thinking of buying makes sense for your budget.
Speed Up Your Repayments
One way to accelerate your debt repayment is paying more than the monthly minimum on your credit cards. Making extra payments can not only help you erase your debt faster it may lower what you spend in interest in the long run. Try sending in an extra $25 weekly. You’ll be surprised how quickly that makes a dent.
Live Within Your Means
It’s so easy to get caught up trying to have the latest piece of technology, say, or the sweetest new ride. But swimming in debt just to maintain that way of life is a fool’s errand in the long haul. Before splurging, examine your budget to see how much you can realistically afford to spend on the item, then hew to that.
Get Yourself A Gig
Find a side hustle to help you pay down your debt and end the dreaded cycle. Examine your skills to see if there’s something that you can do online to supplement your income, or perhaps you can take on a part-time job. Maybe you have a hobby or passion that you can parlay into extra cash.
Breaking the cycle of debt is not for the faint of heart. But then again, neither is a life of indebtedness. Use these suggestions to finally break free from debt, never to return.