Okay, so we all know paying off debt isn’t easy. I mean, if it were, then none of us would have any debt, right? But, there are a few things that can make paying off debt easier (and might I add, less painful). So, if you’re trying to pay off your debts, consider giving these options a try.
1. Establish Your Emergency Fund
Unexpected expenses aren’t fun for anyone. (We’ve been hit with several this year, so I can attest to that fact…) But, they’re much easier to swallow if you have a bit of a cushion to cover their cost. Start by getting at least $1000 set aside to use in an emergency, and then work from there. Be sure to define exactly what does and does not count as an emergency while you’re at it.
2. Focus on Small Debt First
When we’re considering our debt, we all like to focus on getting the biggest amount done first, right? Wrong. If you focus on paying off your small debts first, it will help you in two ways. First, it will help build your momentum. You’ll see how quickly making little changes with your finances adds up, and you’ll be motivated to keep at it. And, it will also help you be able to add additional money toward paying of your larger debts. It’s called the snowball effect, when you roll your extra money from paying off a previous debt into paying off another. You’re able to compound your payment power that way and pay off debts even faster.
3. Compound Your Payments
It’s easy to want to use your extra money from paying off a debt for frivolous spending; however, it’ll help you pay off debts more easily if you use it to compound your payments. You’ve probably already taken the time to figure out exactly how much you can afford to pay on each debt each month, so that means you have a budgeted amount for what you just paid off. Instead of just letting that money get lost in the budget somewhere, apply it to your next payment. You’ll be paying more on this one each month and pay off the total amount even faster. And, the best part is you didn’t have to sacrifice anywhere or make any new changes.
Paying off debt isn’t easy, but it can be simpler if you apply a few strategies. These are the three simplest ways that we’ve found to support our debt payoff goals. They’ve helped us figure out how we can best use our money and how to most quickly pay off our debts. And, they are so simple, I know they can help you, too. So, give them a try, and get on your way to saving money, paying off debts, and living the life you want.
What are your best tips for paying off debt? Do you have any simple tricks that you use?