Are you trying to deal with all of your debts but don’t where to start? You are not alone. Getting rid of dents is hard enough, but there’s possibility that we can pay off debts even when we have limited income!
First: know your financial situation
It’s useful for people to make a chart or just write down every debt they have, including the amount, the interest, the term, the monthly payments. That will give you a clear idea about where you are now. Also, you should write down your monthly expenditure, such as food, accommodation, utilities and other. By doing so, you can easily calculate how much you can pay every month and make your budget accordingly.
Second: pay off the most expensive debt
Paying your debt with the highest rate first, thus, you can gradually minimize your debts. Check your credit cards and sort the interest rate from highest to lowest. The you can review your budget and cut off some unnecessary expenditures, such as cut subscriptions for cable and gym. Or you can save more money by collecting coupons for things you want buy, buying food in bulk when it’s on sale.
Third: pay more than the minimum balance
Paying the minimum balance will only prolong your debt pay-off term. You’ll have to spend more time paying off all your debts by doing so. You can choose one balance to tackle at first. Let’s say, if you have five debts with different balance, pick one to pay more than the minimum balance and others just pay the minimum balance. This will make things a lot easier for you.
Fourth: stop credit cards spending
Credit cards make the process of paying more convenient; however, it does reduce the feeling of “spending money”. You can remove all credit cards from your wallet and try to pay in cash when you go shopping. It’s better for you to take control of your spending and stop debts from accumulating.
Fifth: find an additional source of income
Actually there are a lot of part-time jobs you can do to earn extra money. Some freelance platforms are quite good for people who want to do part-time jobs. Also, you can sell some of your things to earn money, trying to work harder and seek for a promotion and so on. There are many ways to earn more money.