Are you swimming in debt and just waiting for someone, maybe even the lottery, to throw you a lifering to keep you afloat?
If so, then try some of these debt elimination techniques that were shared by financial literacy advocate, Shondy Monroe, at our kick-off event for Financial Literacy Month last night. Before you try a technique, be sure to record all of your debt including the creditor, interest rate, and balance so you have a full picture of what you owe. Debt may include a car loan, student loan, mortgage, credit card, or personal loan.
Here are a few techniques that may get you closer to financial freedom:
- Plug Spending Leaks - Save money by eliminating or reducing spending on items that you may not need and apply that savings to paying down debt.
- Debt Snowball Method - Pay off the smallest debt first then take the money saved to pay off all your other debts. Use any additional money to accelerate payoff; or apply more than your minimum payment.
- Debt Avalance Method - Pay the debt with the highest interest rate first. This method will reduce the amount you may pay in interest over time. Once the most expensive debt is paid off, then keep paying the same amount until all debts are paid off.
- Mortgage Reduction - Set up bi-weekly payments with your mortgage company which allows you to make an additional payment beyond what you'd normally pay on a monthly payment plan. OR Pay a little extra each month to reduce your principal and therefore reduce the interest you're charged.
Make a plan and see how you can reduce your debt over the next year. Figure out what works for you and share your strategy with a friend!