Do you have a mounting credit card debt? Are you struggling to pay off your home loans? What about your car loan?
Loans – you can put them off for as long as you want, but eventually, you will have no choice but to pay them off. The more you delay paying off your debt, the more it will cost you in terms of interest payments. The amount of stress that would put you under is unimaginable
But paying off your debt is easier than you think, as long as you make it a priority and are persistent about it. Follow the tips given here on how to pay off your debt quickly and easily.
1: File your taxes on time.
The importance of filing your taxes online cannot be emphasized enough. The more you delay, the more likely it is that you will be hit with a tax penalty. That would add to your burden and make it even more difficult for you to pay off your debt.
2: List your debts on the basis of interest rate.
Make a list of all of your debts with those with the highest interest rate on top. Start paying off the high interest rate loans first, and work your way down the list. Calculate how much you will need to pay each month and start making the payments. Stay disciplined and persist till all loans are paid off.
3: Start an emergency savings fund.
Fact is, emergencies are a part of life. You cannot avoid them, but you can sure prepare for them when they strike. Your debt payoff plan should include provisions for setting up an emergency fund. This should be your rainy day fund, to be tapped into only when you are in a real emergency, such as a medical emergency or a job loss. This way, you will have something to fall back upon and won’t have to resort to high interest loans such as payday loans in a difficult situation.
4: Make your monthly minimum payments always.
You should always make your minimum payments on time on every credit card debt or other debts. This ensures that you won’t have to pay higher interest on the debt or late fees. Pay off as much as possible on the credit card with the highest interest rate first and then make the minimum payments on the remaining debts. Work your way through to the credit card with the next highest interest rate and so on.
5: Start downsizing.
Take a good hard look at your expenses and start cutting on things that you don’t really need. Do you, for example, need to have coffee at Starbucks everyday? Do you have to eat out every weekend? Can’t you do without buying the latest iPhone? Similarly, find ways to downsize your expenses wherever possible.