Paying Down Post-Holiday Debt
Debt allows us to make purchases that would otherwise be inaccessible. In some cases, this is necessary and a good investment. Buying a home, pursuing an education, or purchasing a car are good examples of this. In other cases, however, debt is accrued through hasty or impulsive decisions. Excessive holiday shopping and travel are good examples of this. If you are still struggling to pay off debt that you accrued during the holiday season, consider implementing the following tips:
Cut out unnecessary expenses. While it is pointless to penny pinch, or make yourself suffer unnecessarily, keeping an eye on your expenses can help with managing debt. Americans spend an average of fifteen dollars per day eating out, which in the long run can often make paying down debt difficult. Other guilty pleasures and bad habits such as random splurges should be kept in check
Sell and Donate. Free up space extra space in your home by selling clothes, books, toys or other items that you no longer use. This can help you save a little extra money in a pinch. Consider having a garage sale or a yard sale. Remember as well that donating items can help you get a tax break.
Check out your subscriptions. Without knowing it, many people are subscribed to internet, phone, or magazine services, and pay monthly bills for services that they never actually use. Likewise, you may have subscriptions that you do use set to a higher level than you want or need.
Create a written budget and account. Writing down your past uses of money and planning the future can help you keep yourself accountable when spending money, as well as help you locate any problem spending you might not have previously been aware of.
Increase income. It’s simple math, you need income to pay off debt. Taking on some extra hours or starting a side gig can help. Although this does require a bit of sacrifice, it is one of the most effective ways of managing to pay down debt — and it can even lead to long-term opportunities in the future.
Use a smart strategy to pay off your debt. Generally speaking, there are two debt strategies that most experts recommend. The first, which is the most mathematically logical math, involves putting all your extra finances toward paying the debt with the highest interest rate first, while making minimum payments on your other sources of debt. This method is called avalanching.
The second method is not as mathematically airtight. In the long run, it actually requires you to pay a bit more. However, some experts argue that it is psychologically advantageous. This method, known as snowballing, involves paying the smallest debt first, to remove the amount of monthly payments that you are making.
Has Your debt spiraled out of control?
Small amounts of debt can be paid down through hard work and determination, but occasionally, unforeseen circumstances in life can sometimes cause debt to reach an unsalvageable level. When this happens, drastic action is sometimes needed. If you are considering selling your home due to debt or the threat of foreclosure, a cash buyer may be able to help. Visit Blue Marble Properties online today to learn more.