Let’s briefly describe what debt is before we dive into our tips on how to pay it off. Essentially, debt is money that you owe to someone else. Debt does not include the items that are simply your variable monthly expenses, like groceries and utilities. Some items that might fall into the category of debt are things like car loans, credit cards, and personal loans. If you are making monthly payments on an item that accrues interest each month, then you are dealing with a debt problem. 360 Credit Consulting in Austin can partner with you to help you get your finances in order so that you can be the proud owner of a great credit report. Contact us to learn how we can help.

Tip #1 – Create a Snowball

Think back to when you were a child and you would roll snowballs down a hill to watch how quickly they grew as they rolled. You probably remember feeling a sense of awe at how quickly everything happened. Apply the snowball principle to your debts and watch how quickly you make progress. Pay off your smallest debts first, slowly working up towards your largest debts. There are two reasons why this is an effective way to pay down debt. When you pay off the smaller balances first, you can quickly cross off a number of companies to whom you owe money, as well as see the progress you are making. Additionally, the snowball process helps you not only to see your progress, but also to feel empowered as you realize that you are gaining momentum as you move towards being debt free.

Tip #2 – Don’t Pay the Minimum

We are not suggesting that you skip payments. Rather, we are strongly encouraging you to pay more than the minimum required monthly payment. The reason for this boils down to basic math. Each month that you do not completely pay off your balance, interest is added to your account. Paying just the required minimum will add years to the payoff date, as well as require more money from you than you originally owed. Decide how much you can add to your payment on a regular basis, and then stick to that commitment to watch your balance quickly change to zero. If you’re able, try doubling your monthly payment for an even quicker end to your balance.

Tip #3 – Take on a Side Job

There are only so many things that can be cut out of your budget until you reach the essentials. Once you’re there, there is little else you can do to find money to pay off debt. So the tip here is to look for a job that you can fit into your schedule, won’t require much of you, and will provide some “extra” money. The idea is to use all the money you make from this side job to pay off debt. Whether you choose to get a part-time job at a coffee shop, or find an online blogging gig, a side job is a great way to earn some extra money that is earmarked for one specific purpose. This will definitely take commitment on your part as it will require more of your time, but it will be worth it in the long run when you are able to see your debt quickly dwindling.

Tip #4 – Get Rid of the Extras

As humans, we enjoy our comforts and have a hard time giving them up. If you find yourself in a situation where you have a lot of debt and you really want to get out of it as quickly as possible, then you need to be willing to look at what items can be cut from your budget. Do you get a daily, or a weekly coffee from the local coffee shop? Do you eat out every weekend? Maybe you like to shop online when you get sales notifications from your favorite stores. While each of these activities is fun and enjoyable, they are not necessities. If you do engage in “extras,” then you should take a few minutes to add up how much they cost on a monthly basis. We are willing to bet that you will be surprised at how much money you can divert from these extras towards paying off your debt. While this may be hard at first, keep in mind that this is simply a short-term decision with long-term benefits. 

Tip #5 – Transfer Balances

There are a couple of options when considering transferring your balances. You could choose to take out a personal loan, or transfer the balance to another credit card with a 0% introductory APR. Transferring your balance is a great option if you are able to pay off the balance within the time frame for the promotional offer. If you don’t believe that you will be able to accomplish this, then you should make sure to check out what their interest rate is after the offer expires. If the interest rate is the same as your current rate, or higher, then it could be detrimental to transfer the balance. The freedom to pay your balance with 0% APR is wonderful as it allows you to pay simply what you owe, nothing more.

360 Credit Consulting in Austin has many qualified professionals ready to help you with reclaiming ownership of your credit report. The factors that shape your credit report do not need to remain shrouded in mystery. Debt is one of those factors, and we are happy to help you determine the best way to get out of debt and start living your life. Call us today!