Digging out of debt can seem overwhelming, but don’t let that stop you from developing a plan. Like many things in life, you can take small steps to arrive where you want to be. Here are some basic moves to climb out of debt.
The best way to pay down debt is to attack the debt with the highest interest rate first. Once you get that debt paid off, you move on to the next highest interest rate. Interest rates are killer, taking the highest out first will free up money faster.
Brave Your Budget
You need to squeeze as much money out of your budget as possible. That means getting tough on your monthly spending. Cut back on as many expenses as you can. No, this won’t be easy. But keep in mind that it’s temporary. Once you pay down your debt, you can revise your budget once again.
Make a Call
As US News reports, a phone call can go a long way toward paying down your debt. Simply call your lenders and ask about any available financial hardship programs. Many lenders, especially now during the pandemic, will be willing to work with you on a payment plan.
Once you get a handle on your debt, make savings automatic so that the circle of overspending doesn’t continue. If you have a solid emergency fund and a sizable savings account, you’ll be less likely to go back into debt down the road.