Are you struggling with credit card debt that seems insurmountable? The good news is that no matter how daunting it may appear, you can climb the mountain of debt and pull yourself out of the metaphorical hole.
Here are some effective ways to tackle your debt and bring it down to size:
Live within your means. The best way to avoid debt problems is to prevent them from happening in the first place. Resist the urge to splurge on big-ticket items you can’t afford. Instead, wait and save up for them.
- By staying within your budget and paying off your bills every month, you can avoid accumulating debt.
- Change your mindset from “having it now” to enjoying it, even more, when you have the money.
Pay off the lowest balance first. Although financial advisor Suze Orman suggests tackling higher interest debts first, paying off a small balance of a couple of hundred dollars can be beneficial.
- By eliminating a payment and saving on interest charges, you can allocate that money toward paying off another bill.
Prioritize bills by interest rate. Paying off higher-interest cards first can save you more money in the long run. Interest charges can hinder progress, so taking out high-interest cards can provide a sense of accomplishment.
Consolidate your debt. Having numerous bills from different credit cards can be overwhelming. Consolidate your debt by taking out a loan from a bank or transferring the balance to another card.
- Transferring a portion of the balance to a new credit card can save you on interest charges.
- Consolidating through a loan can pay off multiple cards and reduce the number of bills you receive.
Use cash and debit cards only. To prevent yourself from accumulating more debt, stop using your credit cards. It’s easy to justify small purchases, but these charges can add up quickly.
- Paying with cash helps develop new spending habits that can prevent future debt problems.
Debt is a common issue that can happen to anyone, regardless of wealth. With discipline, focus, and hard work, you can pull yourself out of debt, even on a tight budget. Take control of your finances and find relief from mounting pressure.