It can be difficult to eliminate debt when you’re busy working, paying the bills, buying groceries, and taking care of a family. Not to mention slowly paying off student loan debt. We have seven tips to help you tackle your debt head-on while still enjoying life and pursuing a rewarding career.
- Track Your Spending. Watch where every dollar goes. That includes food, entertainment, fuel, insurance, and more. Don’t forget about your student loan payments, rent or mortgage, credit card payments, and car payments. When you know how much you are spending every month, it makes it easier to create a budget.
- Create a Budget (that works). Start by setting aside your fixed expenses, including housing, transportation, food, and utilities. Next, remove any unnecessary expenses to leave room for debt reduction.
- Reduce Expenses. Cut out unnecessary spending. That might include monthly television or music subscriptions, coffee shop trips, and/or hobbies. Then use those available funds to pay down debt.
- Try a No-Spend Weekend. For one weekend (Friday to Monday), do not spend any money if possible. That includes eating out, driving anywhere, or renting a movie. Keep track of what you would have spent and apply that money to your outstanding debt.
- Negotiate Bills. While it may require you to close your credit cards, some lenders will work with you to lower the amount of debt you owe with the promise of on-time payments. Additionally, call your wireless phone provider, insurance company, internet service provider and more and ask about reduced rates or the option to reduce services for a lower monthly payment. Then, use what you save and put it toward your outstanding debt.
- Set Debt Priorities. List all of your debt by how much you owe, the interest rate, and terms (how long you have to pay the loan). The lowest balance should top the list, with student loans somewhere near the bottom. With this list, you can prioritize what debts to pay down first.
- Focus on One Debt at a Time. While making on-time payments on all of your loans, try to focus more on the debt at the top of your list. Using the snowball method, pay off that first debt as quickly as possible by doubling or even tripling the minimum monthly payment. Once it’s paid off, add the payment you were making to that loan to the next loan (in addition to the minimum monthly payment). Keep going until all your loans are paid in full.
Boost Your Financial Wellness
More Financial Wellness Matters blogs on topics ranging from financial self-care to protecting your financial health are coming soon. Twice a month, we’ll dig a bit deeper into the relationship between financial health and overall well-being, shedding light on the behaviors and beliefs that drive money relationships. With simple tips and proven insights, we hope to enhance your financial well-being and help you live a healthier, happier life.