Spending more than you earn is a big no-no. That’s how debt grows and grows to the point where you feel like you will down in it. However, if you call upon certain techniques, you can begin to manage your money, control your financial situation and start your journey on the road to getting out of debt. Here are a couple of ideas to help you get out of debt faster:
Pay Off Your Highest Interest Loans First
To work toward eliminating your debt faster, figure out an actual amount that you can afford to use toward paying down debt monthly. Make the minimum payments on all of your debt every month save for one. On the debt with the highest interest rate, pay as much as you possibly can (whatever is left over in the amount you’ve set aside for paying down debt). When that debt with the highest interest rate is paid down, move on to the card with the next highest interest rate.
This method will ensure that you pay the lowest amount of interest in the long run. Also, as you pay off cards and loans, the amount of money that goes to each one will grow because you’ll have fewer payments while paying the same amount of money monthly.
Track Your Spending
The more debt you have, the more you should put aside each month toward payments. Tracking your spending will show you where your money is going. What unnecessary spending is there? Are you wasting money? Track your spending to determine how to set up your budget, and continue tracking your spending to ensure you are staying within your budget.
Check out more great advice from Canadian Finance Blog’s How to Get Out of Debt When You Can’t Manage Your Money.