Are you carrying personal debt such as credit cards and lines of credit that you just cannot pay down? What is the trick to reducing debt?
It’s a simple trick – you need to be paying it off faster than it accumulates. It sounds simple, but it’s hard to do. The following tips are a few ways that you can make this happen:
- Stop carrying your credit cards with you. If you do not have the credit cards with you, you cannot charge anything on them. Having one month where you over charge on credit cards can have a major impact on any bills that you have been able to pay down. If credit cards are too tempting to leave at home, then put them in the freezer in a bowl of water. This makes it hard to take them with you when they are in the middle of a block of ice. They are there only if you truly need them.
- Know how much interest is being accumulated on your debts each month. You need to be paying more than that amount per month to be reducing your personal debt.
- Use cash. It is hard to overspend when you only use cash.
- Have a spending plan for each paycheque. Know exactly how much is coming in on payday and what expenses need to be paid. One of those “to be paid” expenses should be your debt payment. Make this spending plan part of an overall budget.
- Make a change. If your debt is increasing and you want to reduce it, you need to make changes and embrace them. Changing your habits from random spending to regular routines could make the difference.
If you have tried numerous ways to reduce your debt on your own and you are still only making a small dent or it has actually increased, then you may need to consider a different route.
Debt relief should not be a trick. Look for credit reliable options and someone who will explain all those options to you, like a Licensed Insolvency Trustee.
At Hoyes Michalos we will always explain your options including: