Published On: Wed, Nov 28th, 2018

Personal Finance Tips On How To Pay Off Your Debt Faster

Is debt weighing you down and cramping your style? Whether from overspending, lack of gainful employment, or some other reason, many Americans are drowning in a sea of debt.

Personal-Finance-Tips-On-How-To-Pay-Off-Your-Debt-Faster

According to statistics from the Federal Reserve a year ago, the average American households was grappling with a debt load of $137,063. This is all the more problematic when one considers U.S. Census Bureau research demonstrating that the median household income in the U.S. in 2016 was only $59,039. Credit cards, mortgages, auto loans, and student loans were household debt categories that Americans most struggled with.

If you find yourself facing a debt situation and want to fast-track your way to financial freedom, here are a number of tips that will help you to pay off your debt faster.

Cut Up Your Credit Cards

The cold hard reality is that you’ll need to stop using your credit cards if you are drowning in consumer debt. Banks traditionally charge huge interest rates on any debt you rack up using your credit cards, so you’ll find it difficult to achieve financial health if you’re using them. Make a point of saving up to buy what you need and want. You can also use your bank debit card. What you don’t want to do is use your credit card in a way that negates other efforts to reduce debt.

Personal-Finance-Tips-On-How-To-Pay-Off-Your-Debt-Faster

Reduce Your Spending
There are two ways to become rich, according to one school of thought: You can make more or you can require less. Now ain’t that the truth! If you’re struggling with bills and want to really gain some leverage in your debt-reduction strategy, you’ll need to cut your spending. And any money you save should be used to further reduce your debt. You might want to cut your cable altogether, choose a cheaper smartphone plan, swap your smartphone for a cell phone, eliminate your Internet bill if you live in a region where there are lots of wireless hotspots, reduce your discretionary spending involving things like clothing or eating out, and other things.

Increase Payments
It goes without saying that you’ll want to increase the amount you pay to reduce debt…if you’re able. Let’s say that you have two credit card debts and manage to pay off one of them. What do you then do with the money that you had used to pay off the now non-existent credit card debt? It’s simple. You should use that amount to further reduce your other credit card debt. Any cost reductions you’re able to achieve should, as much as possible, be used to further reduce debt.

Consider Loan Options
Another option is to seek a loan. With the loan proceeds, you can pay off all your debt. The benefits of going this route are that you’ll be able to pay off your outstanding debts in one go, reduce your stress load since you won’t have creditors harassing you, and deal with only one entity, namely the loan provider. Shop around to compare terms and rates since they can differ wildly depending on the loan provider. Whether you go with a bank, a private lender, an individual lender, or some other provider, you can find a loan option that fits your criteria.

You’ll definitely be able to pay off your debt faster if you follow the aforementioned advice. Financial freedom can be yours perhaps sooner than you might think, so be proactive and put a plan in place to reduce and ultimately eliminate your debt load.

 

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