5 Tips for Paying Down Debt and Taking Charge of Your Personal Finances
Blog icon
Owing money can feel crippling. You may feel you can’t control your finances but paying down debt is possible. Here are five tips to put you in charge of your financial planning.
Trying to pay down your entire debt may seem impossible. It is best to set smaller, achievable goals. For example, focus on paying off the next $100 by a specific timeframe. Please write down your goal and place it somewhere visible. Once that goal is achieved, you then set another one. This will keep you focused.
Budgeting is hard. It is one of the reasons debt starts to control you instead of you controlling it. Start by educating yourself on your debt.
Each month you have a fixed amount of money with which you can build your budget. Once you understand your debt, you must prioritize first which debts you will pay. For example, your home loan may be your priority each month. You may choose to prioritize the loan payment with the highest interest rate, so you don’t pay more in interest than the money you borrowed in the first place.
Now you understand how much you owe, to whom you owe it, and in what order you need to pay it back. It is time to talk to your lenders to make a plan. Sometimes you can consolidate your total debit balance into a single loan with lower interest rates. Your lender may be able to design a manageable schedule of payments.
Credit cards make it too easy to continue racking up debt. They also carry high-interest rates. Unless you plan on paying your statement in full, you will always be behind on credit card borrowing.
The staff at NiceLoans! will work with you on a financial plan to manage your debt, including an installment loan with a manageable repayment schedule. Visit us at one of our stores to take charge of managing your money.
Set Achievable Goals
Trying to pay down your entire debt may seem impossible. It is best to set smaller, achievable goals. For example, focus on paying off the next $100 by a specific timeframe. Please write down your goal and place it somewhere visible. Once that goal is achieved, you then set another one. This will keep you focused.
Understand Your Debt
Budgeting is hard. It is one of the reasons debt starts to control you instead of you controlling it. Start by educating yourself on your debt.
- Make a list of all current debt, including credit card, mortgage, car loans, installment loans, and money borrowed from friends or family.
- Record the amount owed, the interest rates on each loan, and the repayment terms.
- Make your debt visible in one place to keep on top of it all simultaneously.
Prioritize Your Payments
Each month you have a fixed amount of money with which you can build your budget. Once you understand your debt, you must prioritize first which debts you will pay. For example, your home loan may be your priority each month. You may choose to prioritize the loan payment with the highest interest rate, so you don’t pay more in interest than the money you borrowed in the first place.
Make a Plan
Now you understand how much you owe, to whom you owe it, and in what order you need to pay it back. It is time to talk to your lenders to make a plan. Sometimes you can consolidate your total debit balance into a single loan with lower interest rates. Your lender may be able to design a manageable schedule of payments.
Cancel Credit Cards
Credit cards make it too easy to continue racking up debt. They also carry high-interest rates. Unless you plan on paying your statement in full, you will always be behind on credit card borrowing.The staff at NiceLoans! will work with you on a financial plan to manage your debt, including an installment loan with a manageable repayment schedule. Visit us at one of our stores to take charge of managing your money.