Irrespective of whether you are left with a holiday debt hangover or you’re still striving hard to pay off your high interest debt which you’ve been happily accruing over the last few years, resolve to make 2016 the year to free yourself from the burden of debt. But how should you go about this process to make this year a debt free year for you? As we have crossed almost 8 months of 2016, many of you must have accumulated enough debt which you’re trying hard to repay in the coming year. Whatever may be your situation, here are some simple yet best strategies that you may follow in order live debt free. Let’s take a look at some such strategies.
- Pay much more than just the minimum payments: The foremost step that you should take is to give yourself enough chance to eliminate debt sooner by doubling your minimum monthly payments. As you know there are definitely some minimum payments due on every card and personal loan that you’ve taken out and unless you put in your efforts to pay more than just the minimum monthly payments, you can’t repay debt on time. If you think you have a tough time in doubling those payments, consider enhancing the frequency of making payments.
- Follow the snowball method of debt payoff: Have you ever heard of the snowball effect where you pay off the largest principal balances first so that you can systematically cross each debt off your list. Once you’re done with the debt with largest amount, move on to the next one. This method of debt repayment builds momentum and helps you quickly clear off your debt load. This way you can repay your debts faster than you may realize and you can also see those balances shrink in a few months.
- Set realistic spending limits: If you’re someone who always prefers using credit cards, you need to change that habit. Frequent use of credit cards makes it hard for you to stay within your budget and hence you should switch over to money so that you can easily stop when you run out of funds. Using money will help you in getting into the habit of saying ‘No’ to few purchases which you otherwise could have afforded with your credit card.
- Opt for debt settlement: As a thumb rule, people who opt for debt settlement aren’t able to pay off their debts in full but that don’t mean that y won’t be allowed to opt for debt settlement. If you can prove your financial hardship and also prove that you are striving hard to pay for your necessities, you may be allowed to settle your debts for an amount which is much less than what you owe. This way you can definitely get out of debt.
Therefore if you are keen on living a debt-free 2016 or rather a New Year sans debt, you can follow the above mentioned strategies to get rid of your financial obligations and strengthen your future.