- Prioritizing, Planning, and Paying it off, There is no “one size fits all” solution in the world of finances. People find success with different approaches to debt., Research and organize, In the same way that decluttering your home begins with a huge pile of clothing, you can start to declutter your “pile” of debt by gathering all your details in one place. Analyze it side-by-side and determine which items you need to get rid of first. When dealing with debt, it helps to know the details. Collect as much information as you can for each item. Store credit cards, past-due utility…, Plan your payments, Find a strategy that works for you or invent one that suits your needs. Popular strategies to consider include the “avalanche” method, the “snowball” method, and loan consolidation., Avalanche method, - When a loan has a high APR, it costs you more money each month, because a larger portion of that minimum payment is going towards interest rather than principal. As a result, paying down debt with the highest APR first will save you more money. Think of the chunk of snow at the top of an avalanche breaking off and falling away, taking other pieces of the mountain with it. By breaking off that…, Snowball method, - You pay off a little loan and how does it feel? It feels great! Don’t stop there, though. Apply the amount you were paying for that loan onto the next smallest loan and it’s easier to pay off. This is how your little snowball gains momentum to pay off your debt. Each payoff is a boost to your financial morale and compounds to become larger payments for your larger debt. This method doesn’t have…, Consolidation, - Instead of paying on a bunch of loans, spread over a bunch of institutions, make one smaller loan payment, and pay less interest. We regularly see success stories of members consolidating their debt to save hundreds of dollars every month and enjoy the ease of automatic payments., Pay down your principal, Your principal balance determines how much you pay on interest. Less principal means less interest. Find ways to cut down your debt by periodically making extra payments. These funds could come from: Income that isn’t allocated in your budget, such as a bonus or inheritance Unspent budget, such as food and entertainment expenses Tax refunds or government benefits Side job or temporary employment, Reasons to be careful, Don’t drain your savings. If you’re taking all your savings and putting it on your credit cards and loans, what happens when an emergency comes up? Without any savings in place, you might put these expenses back on your credit cards and continue the cycle of debt. Don’t let fees and penalties expand your debt. Know which loans have additional charges or threaten lawsuits, then plan ahead to avoid…, Need help? Connect with a debt expert., If you’re ready to make a debt-free life a priority, simply fill out the online form to get started. A real, live person will get in touch to talk about your particular situation and offer solutions. Visions cares, so we make the conversation easy. Get started today
