The Best Ways to Get Rid of Small Debts

Most people carry around some amount of debt, such as car loans, credit cards or even late fines on overdue library books. Debt can rack up quickly, leaving you feeling overwhelmed. Fortunately, if you have a few small debts, there are easy and painless ways to get those paid off quickly, leading you well on your way to being debt-free.

The Snowball Method

The snowball method, invented by Dave Ramsey, involves paying off all your debts starting with the smallest, effectively getting rid of small debts quickly. To follow this method, make a list of all of your debts starting with the smallest and progressing to the largest. Write the minimum monthly payment down on each debt. Figure out your budget and decide on any extra money you can put toward your debt each month. Then, on the due dates, pay the minimum amount due on each debt and apply the extra income towards the smallest debt.

Go Above the Minimum

For small debts with a recurring monthly payment, such as a credit card, the quickest way to pay them off is to pay more then the minimum monthly payment each month. If you are already paying more then the minimum monthly payment on several cards, reallocate that money to the smallest debt to get it paid quickly. Simply reduce the amount you pay toward your other credit cards, and then apply that monthly income to your smallest debt.

Add to Your Income

You can pay off a small debt by raising some additional money. Calculate how much you owe on the debt and make that your goal, then find a way to bring in additional income. You could have a garage sale, sell some belongings you no longer have use for at an online auction site, or even take on a part-time job such as babysitting or dog walking.

Cut Back on Your Expenses

Another easy way to pay off a small debt is to save money by cutting back on your luxury expenses. You likely have a monthly expense or two that you could cut back on temporarily, such as a gym membership, daily coffee run or online shopping. By cutting these extras out for a month or two, you can earn enough money to pay off the debt without having to sacrifice your essential budgeting items, or fall behind on your other payments.