The Financial Train: Five Strategies to Eliminate Your Debt
Have you ever experienced sleepless nights because of accumulated debt? The stress of not having anything in order? The anxiety of pending bills? If yes, you’ve come to the right place.
In this article today, I’m going to share with you a few effective strategies to help eliminate your debt. Trust me; it’s the first thing you need to do in order to have your finances in order and achieve your long-term financial goals.
Thus, before you lose any more sleep, have a look at the following strategies, analyze, and adopt one that suits you best:
Credit card debt is a big issue these days. Half of the people in the US. are struggling with their credit card bills and debt. In fact, many of them have their cards blocked due to accumulated credit card debt.
If you’re among them, you need not worry. Simply use the balance transfer strategy to pay off your credit card debt today. In the balance transfer strategy, you transfer your credit card balance to another card with a lower interest rate. It’s like you use one card to pay the debt of another.
The Debt Avalanche
The debt avalanche is one of the best ways to deal with personal debt. As you know, the interest rate that comes on top of the debt makes matters worse. It increases the actual amount that you owe; hence, the burden.
In the debt avalanche method, you hit the debt with the highest interest rate first. It may take additional time but it will certainly save you a considerable amount of money. The less the amount of interest fee, the more the money in your savings account.
The Debt Snowball
The debt snowball method is another effective remedy against your crippling debt. It’s a wonderful method for those who have various debts hanging over their heads. In the debt snowball method, you hit the smallest debt first.
Once you get rid of it, you eventually move towards the bigger ones. However, it leaves one issue behind, which is the interest fee. It doesn’t address the issue of interest rate, which is a concern for many people. Thus, most people prefer the debt avalanche method instead of the debt snowball method.
If you don’t have much time and you’re already past your debt repaying deadline, you can go for debt consolidation. It involves taking a consolidation loan to pay off your existing debt. It’s ironic how taking one loan can help you get rid of another, but it’s actually a popular debt repayment method.
States and large-scale companies often go for debt consolidation. If anything, it saves them from the interest fee. However, I will still suggest you talk to your creditor before taking another loan for paying the existing one.
Here’s the last resort, the last ball in your court, and it’s only an option when nothing else works. If you’re done exploring all other options and nothing seems to work, you can declare bankruptcy and take a fresh start.
It’s a big decision and won’t be easy but as mentioned earlier, it’s the last resort. After all, you cannot live with debt all your life. The numbers will keep adding and as time will pass, it will become more and more difficult for you to pay it off. Hence, you can talk to your lawyer and creditor about it, declare bankruptcy, and close the matter for good.
It requires a lot of planning; thus, you need to be mindful when choosing a debt repayment method and paying your debt. After all, money matters should be handled wisely.