Debt can destroy your financial dreams. Whether you carry a small balance on your credit card each month or are staring up at a mountain of financial obligations, debt makes it impossible to get ahead.
Paying off debt requires dedication, determination and persistence. Here are a few smart ways to pay off debt fast:
1. Stop using credit cards
If you really want to get out of debt, stop using credit cards. The more you swipe, the more the balance climbs. Even if you continue to use your card, avoid leaning on perks such as the ability to take cash advances.
2. Pay as much as you can afford each month
Creating an emergency fund should be a top priority. But once you have accomplished this goal, use any funds at your disposal to pay down debt. The more you pay, the faster you’ll be free of your obligations.
Did you save money at the grocery store by stacking coupons with sales? Use the savings to pay off debt. Did you work some overtime last week? Apply the extra earnings to your debt.
3. Tackle debts with the highest interest rates first
Although some prefer the debt snowball method — which suggests that you pay the debts with the lowest balances first to build momentum — it makes more financial sense to clear those with the higher interest rates out of the way first. The ultimate goal is to pay off debt, however, so the choice is yours.
4. Don’t sacrifice the things you love the most
Paying off debt may require you to make a few lifestyle changes, but it doesn’t have to be depressing. If you have a difficult time adjusting to new circumstances, implement gradual changes so the process won’t become too overwhelming.
If you’re looking for a credit counsellor in Toronto, get a quick assessment with us today or call us at 416.900.2324. We will help you develop a plan, reduce your interest costs and get out of debt over time.