Pay off debt

Financial Tip Friday – How to pay off that annoying debt!

If you’re wondering if you can pay off debt, the answer is yes! Find out how with these steps that will help start your debt free journey.

Financial Tip Friday is brought to you in partnership with the 1st National Bank of Dennison.

Did you know that 80% of Americans are in debt? That’s a staggering amount of people. So even though you’re not alone, don’t stay stuck with it.

No matter how deep you feel in debt, there is a way to pay it off.

There are four steps that you can take that will help you make your way on a debt free journey. They might be difficult to start off, but it will be worth it when there’s no more debt.

Step One – Don’t use debt anymore.

From now on, make the decision to not use debt. If you keep using credit cards or taking out loans, you’ll always be in the spot you are now. It’s hard not to have things immediately, but it’s not worth being in debt.

Commit to this step and you will see progress.

Step Two – Stick to your budget.

Last week, we talked about budgets. They’re important to make sure you’re not spending more than you’re making. You should know where every dollar you make is going.

It can be hard to stay with what you have planned, but if you do so, you’re not going to make unnecessary purchases. This doesn’t mean you can’t have fun or buy anything special. Embracing your budget just means you have to plan in advance.

Budgets also help make sure you don’t use debt anymore!

Step Three – Utilizing the Debt Snowball.

Anyone who has debt and has looked into paying theirs off has heard of the debt snowball method. You’ve heard about it because it works!

To put it simply, you pay your smaller debts off first to gain momentum. Then you work on paying the bigger debts off. Think of a snowball rolling down the hill. It starts of small, then becomes a huge force. This is what you want to do with your debt!

The best way to plan for this is to list all your non-mortgage debts from smallest to biggest.

Then, make minimum payments on all debts, besides your smallest one. Put whatever extra money you have from your budget.

Once that small debt is paid off, take the money you were paying on it and put it to the next smallest one. Then the cycle repeats. You’ll start collecting more money to pay off your debts. By the time you’re on your last debt, you’ll be using all the minimum payments and whatever extra money you have too!

This might take a few months or a few years. Either way, you’re getting your debt paid off and will be debt free before long!

Step Four – Keep It Up!

The previous three steps are not easy to do. It’s a lifestyle switch to change the way you spend your money. Once you make the decision in becoming debt free and stick to these steps, you will be successful.

It takes time, but you can pay off that annoying debt!

Financial Tip Friday

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  1. Pingback: 3 Easy Things for September Financial 'Self-Care' Month - Newsymom

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