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strategies for paying off debt

Living with debt is not easy. It can be a constant burden and easily disrupt day-to-day life. Having debt will also ruin your credit score too. The worse your credit score gets, the less likely you will be accepted for any type of loan. If you find yourself in a mountain of debt, with a bad credit score, you could look into Credit Cards for No Credit. This can give you a much-needed cash injection and the opportunity to start rebuilding your credit. Although your credit will not be fixed overnight, it will certainly help you improve your score. One of the fastest ways to get rid of your debt is to pay your debt off in the correct order.

STEP 1: Create a list of all your current debts

The first step is understanding what you owe. To start, make a master list of all your monthly credit card and loan statements. For each bill, include:

  • The creditor’s name
  • The total amount you owe on that bill
  • The minimum required monthly payment
  • The interest rate (also known as APR)
  • The payment due date

STEP 2: List all of your monthly expenses

Add up all your monthly expenses: rent, car, food, utilities, health insurance and the minimum payments on your debts; as well as regular spending on things such as entertainment and clothing. Subtract that figure from your monthly after-tax income. The remaining amount is what you could put toward debt repayment each month-though it may make sense for you to save some.

STEP 3: Call your lenders

Call your lenders and explain your situation. They may be willing to lower your interest rate temporarily or waive late fees. You may also be able to lower your interest rate by transferring some high-interest credit card debt onto a new credit card with a lower rate (though that’s not a long-term solution). If you’re unsure if this would be a possibilities for your provider/ lender. Have a looking into this lender to review the contact and legalities at,, please do note however that these terms may differ from provider to provider.

STEP 4: Payoff high interest rate or small balances first

You can start with the bill carrying the highest interest, or the one with the smallest balance. Prioritizing the highest-rate debt can save you more money: You pay off your most expensive debt sooner. Paying off the smallest debt can eliminate a bill faster, providing a motivating boost. Whichever you choose, make sure to pay at least the minimum on all your debts. You might also want to find out if you have any additional debts, for example, something like Payment Protection Insurance as there is a ppi cut off date for any claim to be filed.

credit card debt

Pay the monthly minimum on each debt. The exception: your target bill. Put more money toward this one to pay it down faster. Once you pay off that bill, choose another to pay down aggressively. Your monthly debt repayment total shouldn’t change, even when you eliminate bills. This way you gain momentum as you go, putting more and more money toward each remaining bill.

STEP 5: Get creative

You can use your annual tax refund or holiday bonus to pay down debt. Look for small ways to save money every day, such as riding your bike to work, or eating in instead of dining out. Another way to make a dent quickly is to sell unused or unnecessary belongings-maybe downgrading your car to a more affordable model with lower monthly payments.

STEP 6: Break the cycle

As you start to escape debt, it can be tempting to reward yourself by splurging on a new smartphone or an expensive dinner but just a few purchases can erase all your hard work. Instead, buy things with cash or your debit card, and think long and hard before taking on any new debt.

Read this book

If you want to live a debt free life, I strongly recommend you read the book “Total Money Makeover” by Dave Ramsey. Ramsey’s book really paves the way to get out of debt and stay out of debt.

dave ramsey book

Michael Ruger

About Michael………

Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.

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Investment advisory services offered through Greenbush Financial Group, LLC. Greenbush Financial Group, LLC is a Registered Investment Advisor. Securities offered through American Portfolio Financial Services, Inc (APFS). Member FINRA/SIPC. Greenbush Financial Group, LLC is not affiliated with APFS. APFS is not affiliated with any other named business entity. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not ensure against market risk. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.