If you’re like me and you’ve accumulated a lot of debt over the years, this post is for you! You might think that it’s too late in the game to worry about paying off your debt or that it’s impossible. But I’ll tell you a secret: It doesn’t have to be this way. Many people have quickly paid off their credit cards, student loans, and car loans.
The first tip is to start tracking your expenses. This might seem like a no-brainer, but many people never even think about their finances or don’t track their actual income and expenses. That’s precisely what got them into this predicament in the first place! So start tracking your monthly expenses and income, as well as how much you make from your side hustles.
If you’re unsure where to start, plenty of free online resources will do all the work for you. Mint is a great budgeting app that helps you track your expenses and categorize them. If you have a lot of debts, you highly recommend using mint to organize all of your payments and even find the best debt consolidation plan possible.
You can use these fun little accounts to save up for Christmas presents, car repairs, a vacation…you name it! This is such an essential step because it takes away your impulse to spend every dime on something else, which often can be the cause of frivolous spending that leads to overspending.
When paying off your debts, you should also set aside a certain amount of money for monthly savings. This will be your emergency fund, and it should be separate from the money used for paying off your debts. The great thing about this is that you’ll start seeing how much control you have over your finances and even how much you can save if you don’t spend every last cent on something silly.
Once you know exactly where your money is going each month, start thinking about how to allocate it to pay off all of your debt (if there isn’t enough). You’ll want to focus on one debt at a time and make minimum payments on all other charges.
