As you start adjusting to ending your dated signatures with the year 2023, it’s important to set aside some time to think about your goals for this new year. If you’re like millions of other Americans, you’re ready to tackle your debt and see a $0 balance looking up at you month after month. There are several ways to accomplish this—if you’re ready to pay off your debt, use these tips to get the ball rolling. If you’re looking into other options, including chapter 7 bankruptcy and chapter 13 bankruptcy, call Padgett & Robertson at 800-303-1416 for a free consultation.
Know What You Owe
For many people, this is the single most painful step in paying off credit card debt. Before you can have a schedule and a plan for paying everything off, you have to know exactly how much you’ve accumulated. With a pen and paper handy, log into every single one of your credit card accounts.
With each one you open, jot down the current balance due, the due date, and the interest rate. Once you’ve finished gathering all of this information, go ahead and add the numbers up. It’s hard to look at just how much debt you have, but it’s freeing to know what lies ahead for you.
Compare Payoff Strategies
Your list of accounts will come into play in this step. There are several different payoff strategies you can explore. The first is the snowball method. You take everything extra you have for debt payments each month, throw it at the smallest debt on your list, and pay off the smallest debt. Then you take that same monthly amount plus the monthly payment of the smallest debt on the list and put that towards your next-smallest debt. This continues on until everything is paid off.
Another option is to use everything extra you have to tackle your card with the highest interest rate, as that is likely costing you a significant amount of wasted money every single month. You can use online calculators to input your debts, figure out which payment strategy will save you the most in interest, and which one will get you debt-free as quickly as possible.
Automate Minimum Payments
While you’re focusing on paying off your debt, you don’t want to lose money to late payment fees and other avoidable fees. Even if you plan on paying more than the minimum every single month, set up automatic minimum payments now.
If something happens—a busy week with the kids, a sickness that puts finances at the back of your mind, an accident that keeps you busy for a while—at least the minimum payments will still be made on time. This can save you a lot of money when life gets busy and you don’t get to your credit card account quite as quickly as you’d like.
Track Your Progress
There are apps you can use to track your debt payoff. If you have a planner, you can use an illustration to track your debt payoff journey. Figure out what is motivating for you and then use that to track your progress.
See, it’s hard and often not particularly motivating to pay money for goods and services you have already received and enjoyed. You need something to keep you going when you feel tempted to skip extra payments or just go back to minimum payments. A tracker showing how much progress you’ve made and how close you are to that debt-free lifestyle can keep you going one payment at a time.
If you have a tendency to treat yourself a little too often, make a copy of the tracker and put it somewhere that makes sense for you. Maybe you want to look at it before you leave the house in the morning or when you’re on your phone at the end of the day and the shopping sites are calling your name.
In Over Your Head When It Comes to Debt? Call Padgett & Robertson
If you’ve parsed the numbers over and over and they just won’t work out, it may be time to look into bankruptcy. This can give you a fresh start and the chance to change your money mindset. Set up a time to talk with us now. Just call us at 800-303-1416 or .