Many people tell us that they would love to pay down their debt or get rid of it altogether, but don’t know where to start. So here are a few suggestions to get you started. The more of these you can apply, the faster you will get out of debt.
1. Pay More Than the Minimum
Make sure that you always pay more than your minimum payments. Check your statements to see how many years if will take to pay off your credit card if only the minimum is paid. Even an extra $50 each month will help.
2. Spend Less Than You Plan to Spend
Most of us have wants that are bigger than our pay cheques. Many people get into debt and stay in debt because they tend to buy what they want, when they want. If you want something, don’t buy it unless you have the money.
3. Pay Off Your Most Expensive Debts First
Chose the one debt that is charging you the most interest and focus all of your extra payments on paying that one off first while keeping the minimum payments on all the others.
4. Save on Groceries
Stockpile groceries when they are on sale and then skip one grocery shop every month and live off of the food you stockpiled. You can stockpile non-perishable groceries like canned goods, cereal and things that you can freeze. Filling your cupboards when groceries are on sale and then skipping one grocery shop each month can save a family of four $200.00 to $250.00 a month.
5. Track Your Spending and Identify Areas to Cut Back
You won’t know how much you can save unless you know what you’re spending on. Track what you spend over the course of a month. If you aren’t honest with yourself, this exercise won’t work. Once you know your spending habits, you should be able to identify areas where you can cut back.
6. Create a Spending Plan
Remember, a budget is just another way of saying a spending plan. It will make sure that you are spending less than you earn and keep you focused on debt reduction.
Don’t like budgets??? It can be hard if you have never tried one. After trying a realistic budget, most people agree that the alternative—being in debt—is much worse.
The sooner you start dealing with your debt, the sooner you'll have it paid off. The next few years will pass whether you pay it off or not, so start by trying at least one or two of these strategies. You've really got nothing to lose and EVERYTHING to gain!