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Getting to the Bottom of Debt: Smart Strategies You Should Follow

Personal_Finance / Debt & Loans Nov 22, 2018 - 11:38 AM GMT

By: Dylan_Moran

Personal_Finance

We all go through debt at some point in our lives. In fact, debt has become a way of life for Americans and the numbers are staggering. By September 2018, US consumer debt has reached $3.95 trillion. Education and auto loans took up the biggest chunk at $2.909 trillion and credit card debt totaled $1.041 trillion.


It is no secret that getting out of debt can be a struggle, especially if you have too much of it. But being debt-free is always possible if you follow these smart strategies that help you get out of a financial slump even if you don’t make six figures:

Step back and see the big picture

As cliché as it sounds, the first step to dealing with debt is getting to the bottom of it. You need to figure out exactly how much you owe and how much is going in and out of your finances. By comparing how much you’re earning with how much you’re spending, you will have a better picture of your financial situation and determine how much you can afford to set aside for debt repayment. The thing is, you don’t really need a huge amount to pay your debt right away because you can always choose to pay the minimum required payments just so you don’t run out of money for other important expenses.

Financial experts also suggest that you gather important financial information like recent statements for all your loans and credit cards, annual credit reports, credit score and student loan information if you have one. This will help you see where you stand so you can prepare the right strategies to tackle your debt effectively.

Take advantage of lower interest rates

High interest rates can make paying off your debt more difficult, but there are ways to lower them. For one, you can ask your credit card company to lower the interest on your credit card balances. You may also qualify for better interest rates based on your credit. Also, try to find out if you can refinance your car loan with high interest rates or if there is an option for you to consolidate your student loan. You also have the option to apply for debt consolidation loans, which you can learn more of by visiting www.debtconsolidationusa.com.

Determine your most important repayments

Being in too much debt can be overwhelming that you don’t probably know what to pay first. But it’s important to prioritize which of your debts you need to pay off first based on their interest rates. You would want to pay debts that have the highest interest rates so they don’t balloon further. Once you know your priorities, you can already come up with a clear plan on how to tackle your debt.

Stop getting into more debt

You can’t expect to be debt-free if you continue to add to your list of payables. Temptations are everywhere and it’s so easy to get lured into buying things that you don’t need or spending on activities that you can live without. In fact, these habits may have gotten you into deep debt in the first place. Find ways to freeze your credit. Spend only when it’s absolutely necessary, spend more time at home or cut down on your budget. Sacrifices will need to be made if you want to be debt-free, but it will all be worth it.

Be a savvy spender

You will need to spend for your needs, but you can still free up some cash to put towards debt repayments even if you’re not earning a lot. For one, you can lower housing costs by moving to a cheaper apartment, finding a roommate or even moving in with your parents. Cut down on transportation costs by taking public transport every few days and planning errands more efficiently.

If you have that extra car that you can live without, sell it to have more money to repay your debt. If you’ve been spending a lot on food, try cooking more at home and finding cheaper alternatives to expensive grocery items.

The thing is, there is a lot that you can do to get out of debt. Sure, it takes hard work, sacrifice and a lot of patience, but if it means sleeping better at night and not worrying about credit card companies calling you constantly, then it will definitely be worth all your effort.

By Dylan M.

© 2018 Copyright Dylan M. - All Rights Reserved Disclaimer: This is an paid advertorial. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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