Six Tips to Help Eliminate Debt Starting Now 2023 #FinLitFilmFest

1. Put Your Spending on Pause

Before you create a plan to reduce your debt, you have to push aside the temptation to make more. Put those credit cards in a safe place and don’t apply for any new accounts.

2. Create A New Budget and Get Your Family Involved
Take a look at your budget and determine if there are ways you can reduce non-essential expenses while you are getting out of debt. Do you need your entire cable TV package? If you’ve been having dinner delivered, can you cook at home more often instead?

Once you’ve gone through the work of trimming your budget, sit down with your family, and discuss the new changes. Having everyone on the same page and accountable to one another will make it much easier to stick to the plan.

3. Find Creative Ways to Put More Money Toward Your Debt
When times get tough, sometimes you have to get a little creative when thinking about coming up with the money to reduce your debt. Here are some ideas to consider:

• Get a part-time job or start a side business
• Have a garage or yard sale
• Sell any unused items you have lying around the house online
• Put any refunds or cashback rewards straight to extra debt payments

There are many ways to earn extra money that may help you eliminate your debt more quickly. Once you’re out of debt, you may have stumbled across your favorite new way to build your savings.

4. Cash Only
Going to a cash-only spending strategy is a great way to keep yourself disciplined and on track for getting out of debt. You can help to further reduce temptation by putting the amount of cash allocated to each category in your budget into an envelope. Once that money is gone, any additional expenditures should be reserved until the next month.

5. Work With Your Creditors
Your creditors are often willing to work with you to help get your debts to them repaid. Consider reaching out to your creditors to negotiate a potentially lower interest rate. If you are struggling to repay your outstanding balance, you may be able to negotiate with your creditors to pay back a reduced amount.

6. Use the Power of Momentum To Pay Off Your Debts
If you can afford to pay a little extra to your debts, consider paying all the extra money against the highest interest rate balance while making the minimum payment on each of your other debts. Once that balance is paid off, take that payment and add it to the minimum balance on the next highest balance. Continue this momentum until you’ve paid off your last debt. Paying more than the minimum balance can save you years in interest costs and stress.

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Article by:

Valley First Credit Union

PO Box 1411 

Modesto, CA, 95353-1411, US

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Blog by:

George Ohan

U.S. Army veteran