4 Steps to Paying Off Debt

by Miranda Marquit · 2 comments

For many of us, debt pay down is a tricky thing. It can be hard to stay on top of debt payments, and get ahead. In some cases, all it really takes is breaking it down. You can get on the right track to paying off debt if you follow these 4 steps:

1. Recognize the Issues Resulting in Your Debt

Your first step is to understand why you are in debt. What are the behaviors that led you to this point? Overspending? Lack of planning? Buying things that aren’t important to you? Realize that debt is more of symptom, and that the real problem causes the debt might be something else.

Recognize that you need to make changes. Getting out of debt won’t work unless you identify the problem behaviors and then change your approach. Be honest with yourself, and make the necessary changes to the way you handle your money. Once you stop digging the hole, the better off you’ll be.

2. Find Ways to Make Extra Payments Toward Your Debt

Next, you need to figure out how you can make extra payments toward your debt. Once you have figured out which behaviors need to stop in order to stop getting in deeper, it’s time to decide how you can make bigger payments on your debt so that you can super-charge your efforts.

Generally, there are two things you can do:

  • Cut spending so that you can apply the savings to your debt.
  • Earn more money and apply that amount to what you owe.

The best results are achieved if you can do both. Cut back on the things that aren’t important in your life, and look for ways to earn extra money. That way, combined, you’ll have more money to put toward paying down debt.

3. Make Paying Down the Debt a Priority

Create a debt reduction plan that works for you. You need to include that debt pay down in your budget, and make it a priority. Some of the popular methods of debt reduction include the debt snowball and the debt avalanche. Consider what will work for you, and then create a plan.

Stick with your plan, making it a priority to pay down your debt according to plan each month. In order to make this work, you have to decide that paying down your debt is a priority. You have to make a plan and take the necessary steps.

4. Get Help If You Need It

We all need help and support sometimes. This is true no matter what you are doing. When you are paying down debt, it’s especially important to find a support system. Whether you get someone to help you make a plan (this can be a smart move if you are overwhelmed and don’t know where to start), or whether you just need a little support to help encourage you and keep you on the right track, getting help makes sense on a number of levels.

In the end, you’ll be more successful if you have a debt reduction plan, and if you are truly ready to move forward.

Bonus Tip:

You can seriously cut your Internet and TV costs. Find a Verizon FiOS promotion code here and you might be able to spend less every month.

{ 2 comments… read them below or add one }

annoyed July 21, 2013 at 8:53 pm

Perhaps how people get into debt has nothing to do with habits and overspending and more to do with overwhelming medical bills. There are instances where “behaviours” are not careless spending but true problems. Maybe a little less condescension in your articles….

Joan B. in S. C. August 7, 2013 at 1:22 pm

Somewhat along the same lines as @annoyed mentioned, it’s not someone’s fault their employer closes their doors leaving a person with no current employment. Also, even with insurance to help with medical bills, my husband and I still had to deal with a 50% cut in family income after he became permanently disabled less than a year after we got married.

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