| How do I Pay off My Debt?

How do I Pay off My Debt?


Debt is easy to fall into but can cause so many problems. It’s a shame that so many people in America are burdened so heavily with debt. If you already have debt, it’s important to understand how you got into the mess you are in and the mistakes you made, but now the most important thing is to get rid of it.

If you are asking, “How do I pay off my debt?” fortunately, the answer is simple, but actually following through is hard.

In order to pay off debt, you have to pay more than you think you can. Debt is a heavy burden, and the faster you pay it off, the better.

Some debt is okay to have such as a mortgage. Unless you have your own business, this is really the only debt you should ever have. If you have good credit, you can put down a nice down-payment and have a low interest rate.

Credit card debt is the worst debt to have. It has the highest interest rates, aside from payday loans which you should never go near. A car loan is unnecessary as well. Even if you get a good rate, you could have gone used or cheaper and skipped the loan. Save your money if you really want a brand new car.

Pay off your debt NOW and avoid bankruptcy.

I’ve seen commercials on television trying to convince you that bankruptcy is the way to go. They try to give you the benefits of bankruptcy such as you can improve your credit over time. This is true, but it takes a very long time. Loan consolidation is another way, but honestly, the best way to get rid of your debt, minimize the interest you owe, and improve your credit score NOW is to pay it off as soon as possible.

Throw everything you can at your debt!

Make a plan and a budget to eliminate your debt. Spend the next few months, year, or couple of years living on as little as you can until you pay it off. It may sound extreme, but when you get it paid off, you will feel so much better. You will feel less stressed, less burdened, and more together.

Cut out any unnecessary expenses including cable, cell phone (or use a pay as you go phone), excessive eating and going out, etc. If you live in a house that is more than you need, rent out a room, or downgrade to something that will save you money. Find a way to cut down on your grocery bill by using coupons and buying store brand.

Another great way to speed up the process is to get a part time job. Make as much extra money as you can. If it’s near the holidays, you are in luck because many department stores hire extra help for the holiday season. If you can’t get a part time job, offer your skills to other people such as fixing things, baby-sitting, etc.

Don’t bother consolidating, just pay it all off.

Pay off the cards with the highest interest rate first. If you can, transfer your balances to the card with the lowest interest rate.

Once you have paid it off, don’t go back to your old ways, but you can stop living like a pauper.

If you have been saving and earning an extra $3,000 or more per month, when you are paid off, you will have a lot of extra cash on hand. As long as you don’t need this for another expense, first stop your second job. For a short while, you should be able to handle the extra workload, but there is no reason to overload yourself and diminish the quality of your life for long periods of time.

If you think you can afford it and still be able to put a good amount of money aside to build an emergency fund and then save for retirement, start adding back in some treats such as cable. Most of all stop using credit cards and always spend less than you earn. These key tips will keep you debt free along with good budgeting and planning.

Here are a few titles you should consider purchasing for more help in eliminating your debt:

How to Get Out of Debt, Stay Out of Debt and Live Prosperously
Deal with Your Debt: The Right Way to Manage Your Bills and Pay Off What You Owe
The Total Money Makeover: A Proven Plan for Financial Fitness

These are all excellent books that can further you along on your road to financial freedom from debt.

More Financial Planning Articles