People with debt are never quite sure how to pay it off completely. They don’t know where to start or find the best method that’ll help them get debt free faster.
First things first. There isn’t any ‘one best method’ to get rid of debt which works perfectly for everyone.
There are however several effective ways:
Pay Off Your Expensive Debts First
This is one of the smartest strategies that people can follow to get out of debt, fast.
Instead of paying a good amount on one or two debts, leaving the rest aside or paying the minimum on ALL debts and credit cards, choose the most expensive one i.e. the debt that’s charging the most (in interest). Pay off the maximum or extra to that debt. This way, you pay off the most difficult one while still making minimum payments on the others.
Choose the next most expensive debt and follow the same method until you’re left with the least expensive one.
Consider Applying For a Consolidation Loan
Get in touch with a credit and debt counseling service in Toronto and consider options when it comes to debt consolidation.
Your bank can also arrange an effective debt consolidation plan, i.e. turn all debts (consumer) into one, big loan and pay with one payment (at low interest rates). However, this plan of action will only work if you have a working budget that does the following:
- Allows you to save every month.
- Keeps you from taking on more debt while paying off the loan.
Identify Areas That You Can Cut Back On Spending
For this to work, you’ll have to track your spending right down to the last penny. Only then will you be able to recognize your high-spend areas. Next, focus on trimming down the expenses – substantially.
Yes, some monthly and/or expenditures are absolutely necessary but keeping a close eye on your daily spending will help you weed out expenditures that are negatively affecting your budget and credit. Tracking your expenses every month will also let you know how much you should save!
Note down whatever is actually spent over the entirety of one month. Be honest about this exercise and you’ll discover much about your spending/saving habits and how unnecessary expenditure can be cut down. The extra money ‘found’ can be dedicated towards paying off the debt.
You can always take the help of EmpireOne when it comes to creating a fail-proof budget. Applying for and paying the consolidation loan till the very end will become possible. You can also apply for a consumer proposal. Get in touch with a credit counselor in Toronto today and let’s talk about your options! Stay tuned for Part 2!