Paying off your loans certainly isn’t the easiest task. However, if you try to repay the debts as soon as possible, be sure to figure out how much money you can put toward paying off your loans each month. In this article, we are going to help you make your choice and improve your debt reduction plan.
Erase Debt Now
American experts believe that average households waste about 10% of their income every month. So, if you know how to shorten these money leaks you will be able to apply this money toward your credit card debt reduction.
However, if you aren’t sure how big money leaks you have, track your expenses and spending for a few months. First of all, you have to understand where your money is going. Especially if you are a student with lots of additional spending you can find it difficult to make your student loan debt reduction.
When you prioritize paying down the debt you will be able to plan your budget and notice which items hold you back. Once you find it out, don’t hesitate to cut those expenses and use that money to repay your debts. You’ll be surprised at how faster the process will go and how much you will repay only in a few months.
- Read about common debt mistakes here.
Can You Cope with It?
Some people find such extreme debt reduction very practical and useful. But in an attempt to tackle your debt and repay it as soon as possible, don’t forget about other members of your family. This harsh yet helpful method isn’t ideal for everyone and doesn’t work for all households. Perhaps your partner doesn’t encourage extreme saving, or you have teenage children in your family and you don’t want to deprive them of access to extra activities and opportunities.
Remember that extreme frugality may sometimes lead to life dissatisfaction so that a few months later you won’t want to continue it anymore and your whole debt reduction plan will fall apart.
So, it’s always better to be realistic and decide what will be better for you and your household. It may be much more useful and productive to go forward making small steps but move steadily and eventually get out of debt faster.
- Need a debt consolidation help? Read the post.
How Can You Survive?
More than that, trying to define how much you want to commit toward repaying the debt tot up the amount you need to survive. After that, you can count and put everything else for the debt repayment.
Bear in mind that this is a rather extreme approach that won’t be perfect for everyone. So, try this option only if you are sure that you will manage to make ends meet. But if you manage to do it and find this method satisfying, you will see a big difference and notice a lot of progress very soon.
Debt reduction services suggest using the following scheme. To find out the maximum you can leave for repaying the debt, first of all, sum up the money you need to spend on housing, food, transport and other necessary bills.
All money that’s left can be used for debt reduction. It would be even better if you could find the ways to save more or reduce the grocery bill. This method will definitely lead you to pay off your debts in the shortest period of time.
- Learn how to deal with debt collectors.
Having Extra Income
Probably one of the best and most comfortable solutions to find extra money to use for debt reduction is to get extra income. Additional revenue can increase your monthly debt payments. Let’s say, you are into photography. So go ahead and make money with photography!
Think about the amount of money you want to repay each month and count how much you lack to have that sum. You may find a side gig, a part-time job or any other resource of extra money to help you speed up the debt repayment process.
Try out our tips for debt reduction to find out which method works best for you and your particular debt situation.