Nobody likes debt but we've got to understand how to prevent it and how to get out of it when we're in it! I've put together a list of things you can do today to help you manage your debt better. Some of it requires you to do a bit of simple math to understand the best way to reduce your debt. Keep in mind that this is general information because each person has a different financial situation.
If you need help with this, I strongly advise getting help from a Financial Coach and/or a Financial Advisor/Planner. We can help you find the best strategy to pay off debt, give you a plan to tackle this beast to help you live a comfortable life with less money worries! If you can't afford professional help and want to D.I.Y this yourself, YouTube is a great resource! Vanntastic Finances is one of my favorite YouTubers that explains easily how to do this yourself.
Guide to Eliminate Debt
**Doing these will also increase your credit score gradually**
RELAX! 😌You're here to fix this and YOU WILL! 😉
DON'T ADD MORE DEBT!
Find a loan/credit card with low interest rates
Pay your bills ON TIME!
Pay off a little more than the minimum amount. If you can afford to pay more than 1 payment, do it!
Focus on paying off the high interest rate accounts first. These are the accounts causing you the most debt! Have most of your debt pay-off money go to these accounts.
Pay off small debt amounts quickly. Sometimes, there will be very small amounts of debt that you can pay off in a day, a week, a month etc. I recommend that you do this NOW! 1.) They are quick and easy. The dopamine hit you'll receive from removing this debt will make you high with joy and it will prepare you mentally that you can eliminate your debt! Your credit score will increase too! You'll thank yourself later! 2.) You won´t be adding more debt for you to pay off while you´re focusing on the big debt items. Clean slate of debt removal.
ALWAYS read and understand the terms and conditions of your loan/credit card first so that you can know the penalties to avoid them. It is important to know what you're signing.
Contact your lender / creditor / issuer to see if you can refinance or renegotiate the terms of your lending agreement. Some institutions are very strict but others are willing to work with you. Call and find out.
Check if there are Student loan forgiveness programs and income-based repayment programs that can help you if you have student loans.
Make a simple budget. I know most people get turned off by the word ¨budget¨ so think of this as: Know where your money is going! Most of the things you buy, you probably don't actually need. Most people NEED: Food (no, you don't need filet mignon or Lobster!), Water, Home/Apartment, Electricity, Internet, Transportation (public transit / car). Everything else is just a desire or accessory. You can live without the desires until you can afford them. You just have to shift your mindset for a temporary amount of time! Trust me! The goal is to be Financially Free NOT Financially Enslaved!
Set up automatic deposits of your income to your credit card / loan account. Most bills can be paid using a credit card (NOTE: rent is an exception in most cases and you need to keep that money in your checking account). If you deposit your income into a credit card account to pay off your minimum payment and your expenses you will reduce the debt and start saving money. Ms. Vanntastic Explains this concept HERE.
Consider living with a family member or friend to save money from rent for a while.
14. Consider Bankruptcy. Bankruptcy
gets a bad name but you have to understand it IS a tool to remove the burden of all debt when life
emergencies and unexpected
situations occur. It is often used as
the last resort when all other
strategies to pay off debt haven't
worked and it's impossible for you to pay it off! You can file for bankruptcy yourself but it is recommended to get professional help from an attorney/lawyer. Read more about
**The 3 Credit Bureaus to get your FREE Credit Report once a year: Equifax, TransUnion, Experian**
📢Need help with your finances?