Most Americans live with some degree of debt. For millions of people, mortgages and student loan payments are prominent fixtures in long-term financial planning. While many people have little choice but to live with larger debts like these, smaller debts – like credit card balances and auto loans – can be brought under control in a more expedient manner than most of us realize. Getting a handle on these types of debts can effectively free up funds that can be used to pay down longer-term financial obligations. Anyone who’s tired of living under the weight of massive debt can benefit from the following pointers.
Study Your Monthly Finances
If you can’t seem to stop your debt from continuing to grow, sit down and carefully review your monthly finances. While going over your records, try to identify your biggest sources of debt and consider ways to bring spending under control in these areas. Once the foremost contributors to your debt have been identified, brainstorm workable ways to get a handle on the situation. If your spend a sizable amount of your monthly income on takeout and restaurant visits, consider limiting the number of times you dine out per month and/or placing a cap on how much you’re allowed to spend on meals. Additionally, if car payments or gas costs are rapidly contributing to your debt, you may want to consider trading in your current vehicle for something more affordable and fuel-efficient.
When it comes to bringing down your personal debt, a little bit of effort can go a long way. For example, cutting back in the previously discussed areas and getting your debt under control can increase your chances of being approved for home loans. Garden State residents hoping to make the jump from renter to homeowner should start exploring mortgage rates in NJ.
Always Pay Above the Minimum
When taking care of your monthly expenses, the temptation to simply pay the minimum balance can be overwhelming. While not wanting to spend a large sum of money is understandable, this approach will ultimately result in more interest, ensuring that your debt will take even longer to pay off. Even if you’re unable to pay certain bills in full each month, paying as little as $50 above the minimum can help keep interest manageable.
Consider a Second Job
While getting a second job certainly isn’t an option for everyone, having another source of income can quickly make a sizable dent in your personal debt. For people who want to bring down their debt in a timely manner, a second job is often a worthwhile endeavor – provided the income from this job is used exclusively for paying off debt. If a second job is completely out of the question, you can also look into picking up overtime or additional shifts at your current place of employment.
Debt is an inescapable part of life for a sizable majority of Americans. However, this doesn’t mean that people should simply resign themselves to living with an insurmountable degree of personal debt. Regardless of how unworkable your debt appears to be, there are easy and effective steps you can take toward getting it under control.