Having a debt burden is just that a burden. It makes your financial life difficult to say the least. Know this, though: If you’re in debt, you’re not alone. As of April of 2018, American consumers were in debt to the tune of $13 trillion dollars.
However, even though you may be in good company, you may not want to stay that way. The good news is you can ease your debt burden, but to do so, you need to have a plan. The following four tips count as some of the simplest, yet most effective ways you can ease your debt burden today.
1. Know Your Debt Amount
Here’s the plain truth. It’s impossible to hit a target you cannot see. Your debt is the target, and if you’re shooting at it blindfolded so to speak, you’re going to have a tough time managing your debt.
Doing a quick and free credit check via Credit Karma will not only tell you who you owe money to but how much your monthly payments are. Knowing your debt amount will help you better plan your debt-reduction strategy.
2. Make a Bill Calendar
This tip is related to the one above. Once you know how much you owe on your debt, then you’re in a position to make a bill calendar. This is one of the easiest ways to make sure you don’t miss a bill.
Even if you use autopay to pay your bills, you should make a bill calendar. This reminds you to put money in your checking account or to pay on the credit card that you use to pay your bills. (If you use a credit card to pay your bills, do be sure to pay the balance in full each month to avoid interest charges.)
3. Determine Your Debt-Payoff Plan
There are a number of debt-payoff strategies around, the most famous of them being the Debt Snowball or the Debt Avalanche methods. Basically, the Debt Snowball is where you aggressively pay off your debts starting with the smallest debt first. With the Debt Avalanche, you pay off the the debt, starting with the one with the biggest interest rate first.
With both debt-payoff plans, you pay the minimum amount on all of your bills except the bill you’re tackling first. That bill you pay more on. Any extra money you make from a second job or from some sort of windfall goes toward that debt.
Nerd Wallet has a debt calculator that allows you to plug in your debt numbers and see which payoff plan would work better for you.
4. Look for Help if You’re Stuck
Sometimes, debt can become so overwhelming that you feel frozen: You don’t know what to do. That’s when you need to ask for help, according to The Motley Fool.
There are companies, like Iva Advice that offer debt advice and sometimes, debt consolidation options. Companies like these can offer you a fresh perspective on your debt, something that may be difficult for you to achieve on your own.
Really getting a handle on your debt requires planning and discipline. You need to know how much you owe and then make a plan to pay down your debt. Some people prefer to use the Debt Snowball method, while others like the Debt Avalanche better.
Regardless of which one you choose, be sure to pay your bills on time each month, and if a time comes where you feel overwhelmed, seek out professional financial help to get yourself back on track.