Feel Like You’re Drowning in Debt? 3 Things to Do About It
If keeping up with your many debts and loans is becoming a problem, it’s time to finally do something about it. There are several ways you can relieve the pressure associated with multiple debts. In fact, being proactive about paying off those debts is a smart financial decision that’s good for your future. Use these tips to make sure you keep your head above water rather than drowning in debt.
Get Credit Card Debt Under Control
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If you’re behind on payments or overspending month after month, it’s time to get those credit cards out of your wallet and stashed away where you won’t be tempted to use them. Start using cash or debit cards instead to make sure you’re staying within your budget and not spending beyond your means.
Next, tackle your credit card debt by paying it off with a line of credit with a low interest rate or transferring the debt to a card with an interest-free introductory period. You must be diligent about making payments each month to make this work, but if you quit pushing the balance back up by not using credit for purchases, you’ll see your hard work start to pay off quickly.
Refinance Your Student Loans
Many people graduate with multiple student loans. Keeping up with all those individual payments can be tricky, so consider refinancing your student loans with a private lender. In addition to consolidating your loans to deal with just one monthly payment, this option may also allow you to lock in a lower interest rate. That means you’ll pay less over the course of repayment than if you had not refinanced.
Even if the interest rate is not significantly lower, you may be able to secure a lower monthly payment when you refinance your student loans. That can be a lifesaver for someone who is struggling to make their monthly payments and keeps getting hit with late fees.
Find a Few Ways to Cut Back
You don’t necessarily need to cut back dramatically to make a dent in your debt. Consider what “extras” in your current budget could be cut out. Do you really need three different video streaming services, or could you cut back to one? Could you make your own coffee at home rather than buying one at the coffee shop every morning? Perhaps you could bike, walk, or take public transportation to save on gas costs or learn to cut your own hair instead of going to the salon.
The next time you are tempted to order takeout, go shopping for new clothes, or head to the movie theater, think about putting the money toward your debt repayment instead. Little sacrifices here and there can add up a lot faster than you might imagine.
If you’re ready to put your debt in the past, commit to pay it down quickly and effectively by using these tips. Making changes now can help you avoid paying even more money in late fees on interest costs down the line.