Debt. It’s one of the most stressful issues facing nearly 80% of Americans. It’s a dreaded topic that, not surprisingly, most people avoid facing. It’s possible to overcome debt by making it simple and even fun to pay off debt. Follow these simple tips and you may find that it isn’t even hard to do!
5 Simple Tips to Pay Off Debt
1. Start a realistic and easy to follow budget
A budget is necessary for your journey to pay off debt. However, this doesn’t mean you have to pay a lot of money for fancy budgeting software. Oftentimes this ends up being a waste of money. The most simple budgets allow for you to see what money you bring in and the amount of money you spend. It shouldn’t be more difficult that that.
My favorite way to make a budget is to make your own in Excel or Google Spreadsheets. After all, you know your spending better than anyone else. Take out your bank account and credit card statements and track all your expenses in a budget that you make yourself. Need help getting this started? Head here to find out how to make your own.
2. Cut out all unnecessary expenses
According to Maslow, we don’t need many materialistic objects to thrive. We need shelter, food, water, safety, and love. We don’t need much more than that. Figure out what you can cut out and then stop paying for it each month. Do you really need take out coffee? Cable? DVR? Amazon Prime? There are all sorts of things you can cut out that will help you save money.
Remember- once you’ve completed your journey, you can add all of these things back into your life. Chances are, you’ll appreciate them even more after living without them.
3. Turn your journey to pay off debt into a fun challenge
Don’t be doom and gloom about paying off debt. Try to make make it fun by turning it into a challenge or a game. Pretend you are going to go out to eat, pay that amount to your debt, and then eat for less at home instead. Do the same with other things you would normally buy or do.
4. Follow the snow ball method to paying off debt
The snow ball method of paying off debt is by far the best method you can use. The debt snowball works by paying the minimum on all your debts except for the smallest one. You pay all you can towards that one debt so you can pay it off ASAP. Once you’ve paid it off you move onto the next smallest.
If this sounds confusing, you’ve got to check out how Dave Ramsey explains it. He’s a debt genius.
5. Reward yourself
You can’t live without having a little fun. Pocket away some of your money for things that make you happy. If you like to enjoy fine dining, reward yourself with a night out after you pay off a big chunk of debt. Find a way to reward yourself after your debt is gone. Motivate yourself by coming up with a great reward once you pay off your debt. Once you pay off your debt you can save for the things you really want in life!
What are your favorite tips to pay off debt?
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