How Can You Eliminate Debt?

Eliminating debt can free up your cash and allow you to save more of your money. Debt can accumulate from excessive credit card use or taking out several personal loans. Creditors charge interest rates, and if paying a high rate, it can take longer to pay down your balances. There are tricks to help you eliminate your debt faster. Establish a plan to get rid of balances, and stick with your strategy to enjoy debt-free living.

Instructions

1

Write a list to see how much you owe each of your creditors. Make a spreadsheet or write out your creditors and the amounts you owe on a paper. Include the interest rate for each debt and the minimum monthly payment.

2

Assess how you spend your money. Keep track of all your expenditures for an entire month to see where you can cut back and save money. Include recurring expenses in your budget such as housing and transportation, and then track how much you spend on extras like shopping or dining out.

3

Reduce spending. Resolve to spend less on nonessentials. Give yourself a modest spending budget for extras. Do not go over your budget. Take the savings and use this money to pay down your outstanding debt balances.

4

Increase monthly payments to creditors. Break the habit of paying only minimum payments each month. For example, if you have an extra $300 in spending cash each month, put this money towards a credit card to eliminate the debt. This amount of money can pay off a $1,500 balance in five months.

5

Eliminate some recurring monthly expenses. Cancel cable services or get rid of your house telephone service (use a cell phone instead) to save money each month and help bring down debt balances. Other services to possibly cancel include lawn services and other household maintenance plans.

6

Negotiate your interest rates. Credit card interest rates are negotiable. Ask your card companies to reduce your present interest rates in order to pay less interest each month. With higher monthly payments and fewer interest charges, you can reduce the balance quicker.