Eliminate Your Debt Now
An important financial goal should be to eliminate your debt in a timely fashion. Debt can sneak up on us until the amount overwhelms us. Resolve to begin reducing your debt now. Here are several ideas to start the process:
1. Review your budget. If you do not make discretionary purchases, how much money is available for additional debt payments? Look for ways to reduce everyday expenses.
2. Eliminate your credit card debt. Examine monthly bills. How much is interest? Do not charge anything unless necessary. Use some of the funds previously earmarked for discretionary expenditures to pay down this debt.
3. Pay off credit cards one by one, and shred most of them. Keep one or two. You will have a better handle on spending if everything is listed on one bill.
4. If you have outstanding home equity or car loans, pay them off at a faster rate than the minimum monthly payments. Pay off loans with the highest interest rates first.
5. Renegotiate high interest loans with large outstanding balances. With lower interest rates and the same payments you are currently making, you can pay these loans off sooner and save a lot of money on interest.
6. Consider renegotiating your home mortgage. Look for a low interest, fixed rate loan with the shortest time period you can afford. If refinancing is not an option, think about adding additional funds to each monthly payment. This reduces the total amount of interest paid, and pays off your mortgage sooner than the stated time period.
7. Do not stop saving. If you currently are not saving anything, start now. Funds from each paycheck should go into your retirement plan.
Sacrifices will have to be made in the short term to eliminate your debts. However, in the end, it will be worth it. More money will remain in your pocket. You will have peace of mind and more choices with the funds now available. Rather than paying off debt, you can think about building wealth.