Most people have experienced debt at some point in their lives. It can come in the form of a mortgage, a car loan, student loans, or the most common, credit card debt. Depending on one’s situation, being in debt can wreak havoc on one’s financial situation. When this occurs, the best course of action is to try to eliminate the debt.
The first thing to do is look at what type of debt you have accumulated. Most people have a mortgage and car loans so that is ‘acceptable’ debt. Think about paying off those types of loans second to anything else. The debt you want to consider eliminating is the debt from credit cards, student loans, or money borrowed from family. Sending in minimum monthly payments will eventually paid off the debt but it could take years while costing you more in the long run. The best way to do away with your debt is by accelerating your bill payments on a monthly basis.
A smart way to attempt this is to pay your bill online so that the payments are automatically withdrawn from your bank account by the payment due date. Paying your bills in this manner will prevent any late fees from incurring due to a payment being late. Late fees can increase your balance and end up putting you further behind.
When trying to pay off debt it is best to choose one bill and concentrate on paying it off instead of trying to tackle all of them at the same time. It is important to pay more than the minimum amount due on this bill while making minimum payments on the others. Once you have succeeded in paying off one bill then move on to the next.
The way you go about paying extra money towards a bill is entirely up to you. There is the option of making bimonthly payments. Finding the extra money may be a problem and therefore, you will need to find ways to increase your income. This can be done by getting a second job or selling items you no longer need.
Once you have gotten one bill paid off then it is time to move on to the next. Always remember to take the monthly amount that you paid toward the prior bill and apply it to the new bill, in addition to the minimum payment of the new bill. For example, consider the scenario of Payment A being $50 and Payment B being $25 per month. Once Payment A is paid off then take that $50 and apply it to Payment B, making Payment B’s monthly total $75. Continuing this method for all your bills is a very effective way to accelerate your bill payments and getting yourself out of debt sooner than expected.