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Accumulating debt is easy, and so is ignoring it. With all of the finance apps and different bank accounts, some of us find ourselves losing track of our money. So you add another credit card, but that only makes the problem worse.
It’s not that hard to get rid of debt quickly. Just follow these simple steps:
Pay More Than The Minimum Payment
When payday comes around, it can be tempting to use it for a night out with friends. But first take time to look at your credit card bills and try to pay off more than the minimum amount. The way you get out of debt and earn a good credit rating is by paying things off each month. Not by letting things sit on your card. Even if you can’t pay everything at one time, always do a little more than you think you can.
Within three to six months you will see your credit card bills cut enormously. Added bonus? Your stress level will be way down when you see lower totals.
Accelerate Your Payments
If you get paid on a bi-weekly basis, it is worth your while to make your credit card payments twice each month. It might feel overwhelming to double your payments, but it’s a fast way to erase debt. Inspect your current spending habits and find a way to pull the extra payment from your paycheck.
By sending your debt collectors a check twice as many times, your debt will shrink twice as fast. Make it the first payment after you receive your paycheck. Don’t think about it. Just do it.
Make A Budget
It sounds basic, but a budget can be a life-saver. Most people will budget based on their paychecks and allot a small amount for their student loans or past debt. But one or two months isn’t enough. You need to stick to it long-term. That means you need to write a budget that’s realistic and doable.
Try to cut yourself off when you hit your limit, and see if your pause on frivolous spending can help you refocus. If you’re someone who has trouble holding yourself accountable (no pun intended), consider downloading a budgeting app. The financial tool Mint has a great reputation for helping people stick to their budgets by connecting to various financial accounts. Not only does the app send you alerts when you surpass your spending limit in a specific category, it also reminds you about upcoming payments, fees, and suspicious transactions.
Use Surprise Cash To Pay Off Debt
We’d all be lying if we said that tax refunds and stimulus checks are always used to pay off bills. But, let’s be honest, surprise cash can help a lot with debt. These windfalls can be extremely helpful when it comes to getting rid of debt quickly.
Keep in mind that this is money that you never planned on. You never planned on buying that new laptop or going for that expensive dinner with friends. Forget the fancy purchases, and instead try to erase your debt.
The IRS has extended the tax filing deadline by one month to May 17. So most people can expect to see their tax refunds by the end of June. Take this time to review your debt and mentally prepare to pay it off with the extra cash coming your way– it will make a world of difference.