5 Steps to Tackling Your Debt

Feeling hopeless when it comes to your debt? Like it just keeps piling up, and there’s nothing you can do about it? Well, there is something you can do, and we’re here to help. Follow these five steps to lower your debt and take better control of your finances.
Step 1: Create a list of what you owe.
To start lowering your debt, you first need to understand what you owe. Create a list of your debts, how much you owe on each, the interest rates and the minimum monthly payments. This will help you create your game plan to deal with your debt.
Step 2: Get organized.
Being disorganized can add stress to an already stressful situation. Getting organized can simplify things and make it easier to get that debt down. One thing you should do is update your email address on all of your credit card, loan lender, bank and bill accounts so all of your notifications come to the same place. You should also mark on a calendar when each bill is due, and cross it off when you have paid it. Between consolidating your notifications and using a calendar, there is no excuse for a missed payment. Another thing that might help is signing up for text alerts when a bill is due.
Step 3: Consolidate.
To make your credit card payments more manageable, and lower your overall monthly interest charges, consolidate your credit card debt into one credit card account. Look for offers that will allow you to transfer balances onto one card. Many of these offers are interest-free for a year with a small balance transfer fee. Just make sure you read the fine print. Some offers’ interest rates go sky high after the initial “teaser” period. If that’s the case, find an offer with a lower interest rate, or mark on your calendar when that zero percent interest ends so you can either transfer to another card or have your debt paid off by then.
Step 4: Make a plan.
There is no right or wrong way to pay off your debt – it’s whatever works best for you. What debt will you tackle first? Your lowest balance? The debt with the highest interest rate? Another aspect of your plan to determine is how you will pay off that debt. Maybe instead of paying one monthly payment, you could make small payments each time you get a paycheck. Or maybe you can sell your crafts online and use that extra income to make larger payments. Another idea is to reduce spending and put that saved money toward your payments – can you lower your cable bill, or maybe brew your coffee at home instead of stopping at Starbucks every morning? Whatever strategies you choose, set short-term goals for yourself to stay motivated and make progress.
Step 5: Take action.
Once the game plan is set, it’s time to make moves. Know when your next bill is due, make your payments on time and try to save money wherever you can. Stick to the intended plan when it comes to what you want to pay off first and how you’re going to do it. With some effort and determination, it is possible to get your debt under control and paid off!