When you are loaded with debt, it can be difficult to imagine an end to it. More often than not, the payments feel like they stack with no end in sight, but the situation is almost never as terrible as it seems. If you find yourself struggling with debt, follow some of these tips to pay off as much as $20,000 in just one year.
Organize The Debts by Interest Rate
One of the first and most important things that you need to do to begin tackling your debt is organizing it. Knowing exactly how much you owe and by what margin can be invaluable in starting to work it down. Order all of your debts from the highest to the lowest by their interest rate. Tally up you balances from credit card, car payments, online short term loans, student loans, credit card balances, and any other debts. Focus the order of re-payment according to interest rate, as this will allow you to save money in the long-term. How you view introductory rates depends largely on long-term calculations, but these should also be prioritized to avoid mounting costs.
Pay the Minimum on All Your Debts
No matter the specifics, there are always minimums that you need to be paying on all of your debts. Depending on the source of the debt, you may need to verify the minimum required. Credit cards and loans will usually have a website that you can visit to check how much you owe and how much you will need to be pay as a minimum per month. The fastest way to pay off all of your debt is to pay more than you need every month, but if you are not able to do that, your monthly minimums will allow you to keep your credit safe and still work towards your financial future.
Prioritize Extra Payments Towards High-Interest Debt First
After you are done with your minimum monthly payments, it is important for you to take a look at your finances and your list of priorities. Try to put away a little bit of the money that you earn towards your savings, but if you have enough left over afterwards as well, it is important for you to focus on your high-interest debt. Putting this extra money towards your regular payments will allow you to clear them faster. Even putting a little bit at a time can be a good way to start seriously chipping away at what you owe, especially if you feel as though you need to have a little breathing room.
Generate Extra Revenue Where Possible
You may surprise yourself with the possibilities when you find new ways to generate revenue. Think about things that you can do to bolster your finances and plan better for clearing your debt. If you have some loans that you need to pay off fast, host a garage sale or yard sale and get rid of some older items. If you know of some job openings that can allow you to generate additional income at a temporary rate, take the time to apply. If you have talents that you can use online, you can consider offering your services at freelancing websites as well.
As you start to lessen your debt, the most important thing to remember is to avoid taking on more in the future. Credit cards and other small lines of credit can build your score, but discipline will be your greatest ally in keeping your debt down. Follow these tips as best as you can, and you will notice a difference in your debt as early as one month.