Get Out Of Debt Quick! Here Are Our Top 8 Resolutions For 2016

women-worry-debtsCarrying a load of debt can be extremely stressful. It can lead to sleepless nights and it can put a strain on your relationship with your spouse or partner.

It will take commitment to get out of debt in a reasonable period of time. You will need to drastically change the way you think about handling your money.

  1. In order to devote as much money as possible to debt repayment you need to come up with a budget that cuts out money spent for frills. Until you are out of debt eliminate as many of your discretionary expenditures as possible.
  2. Strive to fund an emergency account with at least $1,000 to cover an unexpected expense. This way you won’t have to resort to using credit.
  3. Stop using credit. If you do not have the money for an expenditure do not purchase it until you do have the funds. While you are working to get out of debt you don’t want to even consider spending the money or obtaining more credit for a new vehicle or furniture or anything else that can be put off. Make do with what you have till you are debt free.
  4. Develop a strategy for paying off your debts. Are you aware that it can take 20 years to pay off a credit card if you only make the minimum payment?

Sit down and make a list of all your debts except your mortgage. Be sure to include any medical bills or loans from family and friends.

You can make your list in either of two ways.

One way is to list your debts starting with the debt with the highest rate.

The second way to make your list is to start with the bill with the smallest outstanding balance and continue listing to the highest balance amount regardless of the interest rate.

  1. This is a good time to contact your credit card company and see if you can negotiate a lower interest rate. If you have been paying on time it is possible they will agree to lower the rate some.
  2. The method you use to attack your debt is up to you. Some folks like to start with the smallest balance and apply all of the extra money to this bill so it will go away quickly.   This will give you the satisfaction of having one less bill to pay. Once the lowest bill is done the payment money from the first bill is then added to the minimum payment for bill number two.

Other people prefer to put additional money on the bill with the highest interest rate even if the balance is high. It will take longer to have the satisfaction of a paid bill, but when it is done you’ll have the satisfaction of a big chunk of debt gone.

  1. Either method will work for you. Put as much money as possible toward the bill you are focusing on and make the minimum payments on time on all other bills. As one bill is paid then add those funds toward the payment of the next bill.
  2. To speed up your debt repayment consider getting some part time employment or selling some items you no longer need.