We all carry some form of debt, whether it’s an auto loan, mortgage, or the worst of all, credit card debt. While student loans and mortgage may carry the lowest interest rates, you still don’t want to be spending your hard-earned money on interest, so the more you can pay down to get out of debt, and stay out, the better. By making a few life (and spending) changes, you can be on the path to financial success, however it will take patience and discipline, but definitely worth it in the end.
Seek Out Lower Interest Rates
Depending on the balance and interest rate you’re paying, you could be dumping a significant chunk of monthly payments just on interest, so starting with the highest first, your credit card, you can look to negotiate your interest rate, or because there is so much competition out there, you can easily transfer your balance for a low promo rate to give you a lift to pay off within a fixed period. From there, keep an eye on mortgage rates to ensure you are paying the least amount, and when it may make sense to refinance if you’re playing on staying in the home long enough to cover closing costs.
The Days of Overspending are Over
The first step to curb spending is to first face the hard truth of how much you’re actually spending in a month by looking at your last debit or credit card statement. From there you can actually go line by line and decide what was necessary and what probably could have been avoided. Just for fun, add up what could have been avoided and see how much that adds up to. It’s probably scary how much you could have left in your account if the impulse purchases and restaurant trips slowed down.
Take Advantage of Free Money
While a credit card may have been what got you into debt in the first place, if used responsibly they can actually make solid financial sense, and probably the best reason is the rewards. By even making the purchases that you were going to make anyways, whether it’s on monthly bills, food, gas, entertainment, by using a credit card for every purchase you can earn points that can be redeemed for gift cards, or even earn cashback every year. With a solid budget and discipline, if you can spend what you can afford and earn free money, you can put that back towards your debt.
You Can be Happy with Less
With the multiple social media platforms, virtually everyone likes to brag about what they are having for dinner, the concert they’re at, or a vacation selfie, but don’t let that drag you down. Be happy with what you have, and when it comes to something you want or a trip you are looking forward to taking, by properly saving up and budgeting for, by being happy with less in the short-term can guarantee long-term happiness without the debt attached to it, and avoiding spending years trying to get out.