The next step to getting out of debt is to face the truth. Yes it’s scary, but it’s time.
First, gather up your most recent credit card and loan bills. You are going to compile a list of how much debt you have. The statements will give you several key pieces of information that I want you to write down:
|Balance Owed||Interest Rate||Minimum Payment||Number of months and/or
years to pay off
Now total the columns.
I know this is a big step, and I want you to congratulate yourself for doing it. Once you know the truth, you can take proactive steps to deal with it.
Now, explore options to pay off your debt as fast as possible. You could…
- Pay a higher amount towards the highest interest rate debt while making minimum payments on the other debts. When that’s paid off, move on to the next highest interest rate until you are done.
- Pay a higher amount towards the smallest balance first, so it’s paid off quickly. That will give you a sense of accomplishment and keep the momentum going until all debts are paid off.
But is there another way? What if you could…
- Find a balance transfer to lower or consolidate your debt? You’d ideally want to find 0% interest for the life of the balance. Yes, you will incur a balance transfer fee (typically 3%), but you will be saving the difference in the interest rate you’re currently paying.
- Contact your creditors and ask them to lower your interest rate. You want to do your research first, and be prepared to ask for a supervisor if needed. An interest rate reduction of any kind will save you money and keep the overall balance lower while you pay the debt down.
For more information and support, join my free private Facebook group “Say Bon Voyage to Your Debt”. We officially start on July 3. To get individual support and worksheets, sign up here: www.facebook.com/groups/PayOffYourDebt/. To receive a bonus budget tracker, sign up through my newsletter
In Step 3, we will discuss ways to find money and change your spending habits.