Having a list of debt payments to deal with every month can add a lot of stress to your life. It takes a chunk out of your bank balance and gives you one extra thing to worry about. From credit card debts to car payments, they can all add up.
Sometimes it can feel like your debts will drag on forever- especially with interest rates adding to the trouble. You might need to try something new to tackle your debt and improve your financial future. Paying the minimum payments each month can take you so far. But other approaches can make handling debt cheaper and quicker. Here are some strategies to try out.
Consolidate Your Debts
Debt consolidation is a highly effective way to start tackling all your payments. Instead of having to keep track of a bunch of different debts, you can cover them all in one monthly payment. It works by taking out a loan to cover all your debts. Then you just have to focus on paying off that one loan.
By using a consolidation loan to pay off your debts, you can even make them cheaper. It’ll eliminate rising interest costs and make the expenses much more manageable. It’s also easy to do- just look into companies offering secured debt consolidation loans.
The drawback is you may have to spend longer paying off your loan. But your monthly payment will be adjusted based on what you can afford. It can help you save more each month while you gradually take on your debt.
Try The Snowball Method
The snowball method is a popular strategy many people use to pay off their debts fast. Instead of paying the bare minimum each month, you start tackling your debts with high payments. You start off with the smallest payment and work your way up to the biggest.
It involves paying the minimum payment on all your debts each month, except the smallest. When it comes to the lowest payment, you put as much money as possible into paying it off. For instance, perhaps you have a £300 credit card debt to pay off. By paying it off in full, you’ll have one less payment to worry about next month.
Once you take on the smallest debt, you move on to the next lowest. By the time you reach the biggest one, you’ll be in a much better financial situation. Many people have success using this strategy.
Use Money Management Apps
People use their smartphone for all sorts- so why not use it for helping you with money? There are many apps out there which can help you handle your finances. Some even focus on helping you repay your debts.
For instance, the Debt Manager app on the iTunes store helps you pay off your debts fast. You can put in the details of all your payments, and it’ll calculate how quickly you can pay them off using the snowball method. There are also other apps which can help you plan a strategy for paying off your debts.
There are also apps out there to help you budget and improve your saving habits. By making use of these, you can use more money to pay off your debts.