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Financial Tips For Tackling Your Debt

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Debt is something that every American will face at some point or another. The first thing that comes to mind when you think of debt is credit cards or maybe your student loans but the most common form of debt is a mortgage.  Most people decide that they will never pay off their debt and choose to just ignore it and pay the minimum every month. With that type of mentality, you probably won’t ever pay off your debt. Here are a few easy steps that should only take you about ten minutes each, but will help you tackle your debt.

#1. What Kind Of Debt Do You Have?

In the world of debt, if you can call it that, there are two types of debt, priority and non-priority debt. Do not let the names fool you, both are important but one of them definitely trumps the other.

Priority debts refer to debts that have to deal with things like your house, bills, and even child support. These things should be paid off first because if they aren’t you could either be homeless or in jail.

Non-Priority debts should not be ignored, but they are definitely still important. These debts include things like credit card bills and bank loans. Although it seems like all they do is call and ask for the money, they can actually go to the courts and have your bank accounts frozen and your earnings deducted.

Financial Tips For Tackling Your Debt

#2. Make a Plan

The first thing you need to do is figure out your current financial situation. Make a list of all your current expenses and your income. If your expenses are higher than your income, you already have a problem. The first rule is to make more than you spend. After that you need to make a budget, decide how much money you can allocate to paying off your debt while still being able to pay your bills.

#3. Pay Your Debt

Before you actually start paying your debt, you should look at your rates on all of them and see if you can do anything about lowering them. You always want to prioritize your debts by paying off the bigger ones and only paying the minimums on the smaller debts. Sometimes taking out a second loan, like a TitleBucks.com loan, can help to pay off big debts with high interest rates in exchange for a low interest loan.

Another thing that could help you is to look at your savings, if you have a savings account. If the money in your savings is accruing at a lower interest rate then your debt, it would be smarter to use the savings money to pay off the debt in the long run.

An important thing to remember is that these lenders want you to pay back the money no matter what. So do not be afraid to call them and ask for more time or a lower rate on paying back your debts, a lot of times they will work for you. They are people too!