Although it may seem impossible and you feel overwhelmed, don’t worry! It takes patience and time, but you will be able to slowly pay off your debt. Stay positive and keep working at it – you’ve already taken a great step by reading this blog. Here are some simple ways you can start paying off your debt.
Create A Budget
You need to have a budget in order to successfully strategize on paying off your debt. Go through your monthly expenses in order to know the maximum you need for essentials like health insurance, rent/mortgage, utilities, groceries and so on. Then see what you can cut – do you have a gym membership, four different streaming subscriptions or stop for coffee every morning? Cutting small costs like this can save you a great deal over time, which can be contributed to your debts or into a savings account.
Start With The Smallest Debt
Tackling your largest debt may seem overwhelming, so start with the smallest one. Look at your budget and what you can afford after making minimum payments on all other debts and monthly expenses. Then pay as much as you can each month on that small debt. You’ll soon be able to have that one paid off! If you do have a larger debt with a much higher interest rate, it would be wise to start there instead.
Pick A Strategy
There are lots of different strategies that people use to pay off debt. The debt snowball is where you focus on paying off your smallest debt first and then roll that amount into the next biggest debt when the smallest was paid off – and then on and on. Debt avalanche is where you pay the debt with the highest interest rate off first and so on. You can look up different strategies to see if one fits you best.
Pay More Than The Minimum
When you’ve paid off a debt or two and limited your spending, you’ll have more funds to make a dent in your debt. This allows you to pay more than the minimum which will help you pay off everything faster! Working on paying off your debt quicker over time will help you out in the long run.
Meet With Local Bank Representative
At Banterra, we will be happy to review your current banking products and discuss your debt situation to help you determine potential solutions to help with your financial goals. Maybe you need a personal loan for debt consolidation? Maybe you need to switch your current credit card debit to a lower interest credit card that we offer. It could be a simple solution like automatic transfer set up from your checking to savings, overdraft protection or a different checking account. Let us help you – you can stop by any of our locations and you can also make an appointment online.
Reward Yourself
You have been stressed, but have been working hard to slowly pay off your debt. It’s important to give yourself a reward after large milestones – like paying off one debt. This will keep the experience positive and give you something to look forward to, so you keep on grinding at your goals.
We hope this helps you find a starting point to get your finances under control. Remember, there is always a light at the end of the tunnel. We wish you the best of luck and are always here to offer solutions to help!
July 12, 2021 by Banterra Bank
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