For most people living in the United States, debt can feel like a way of life. The cost of everything has gone up in the last two years, and many find it hard to stay caught up with what they owe. The debt accrued by adults in this country can encompass credit cards, student loans, medical bills, car payments, mortgages, taxes, and even more – and we haven’t even addressed how interest rates can make debt even more daunting. This debt, if not managed, can play a big role regarding your credit score and your ability to borrow money, so it’s important to stay on top of it as much as possible.
If you find yourself stuck when it comes to your debt, here are a few tips that might help you achieve relief:
Add up what you owe.
In order to get a good idea of the best strategies to pay down debt, you need to know how much you owe across the board. Your balances are only part of the total – almost all credit cards come with an APR, and if your rate is high, you need to factor that into your equation. Some credit cards also come with an annual fee, which you should include in your calculation. Check out the interest rates on any loans you have and factor them in as well.
Go above the minimum payment each month.
While it may seem easier to simply make the minimum payment on your credit card and loans each month, this will actually make it more difficult to pay off your debt in a reasonable turnaround time. As well, as your debt ages, your interest rates will rise with them.
Set a solid budget going forward.
While increasing your monthly payment will help you pay off your debt faster as well as keep your interest rate from skyrocketing, it also requires some careful planning to ensure you stay above water each month. Creating a firm budget that includes all of your monthly expenditures, both fixed and fluid, will help you avoid facing financial dire straits while you pay off what you owe.