Make Debt fun again
Debt was never fun, but let's make paying it down fun for your financial health and well-being!
Being in debt can be hard, and it's easy to be in denial about what you owe, but here are a few fun steps for debt management.
1. What's your number
The first step to addressing your debt is to actually know the number (to the penny) what you owe to whom (credit card, student loans, car loan, mortgage, etc). An important part in knowing the dollar amount owed is also knowing the interest rate associated for the debt as well. Then, once you have the full picture of your debt, you can start to efficiently and mindfully chip away at it.
2. Interesting rates
The higher the interest rate on the debt, the more expensive for you, and the longer you take to pay it off, the more money it will cost you. Conversely, the sooner you pay it off, the more money you'll have for yourself.
Debt with the highest interest rates should be addressed first. Typically this is credit card debt. Interest rates are sneaky and the reason why it's so difficult to get ahead of your debt, so mindfully trying to pay in excess of the minimum payment is key to paying down these more expensive loans.
3. So Extra
Put any extra money towards paying down debt, in excess to minimum payment. Any birthday money, bonuses, or a raise should go straight to the debt pile. The only way to actually get a head of the debt itself, is to pay more than the required minimum payment. Paying yourself first can be helpful here: when you receive you pay check, automatically designate an amount to go towards your debt first, rather waiting to see what's left over. This not only adjusts your mindset about savings but also could be a life saver when it comes to eliminating debt.
4. Cashing in
If you're really serious about paying off your debt, it's important to not incur additional debt. Credit cards are not your friend in this situation, so ditch them for a bit and see where it takes you. Using only cash or your debit card will force you to spend what you already have and most likely cause you to be more mindful than just swiping the plastic.
5. Deep down
Staying out of debt it just as important as paying it off, so understanding what landed you into debt is key in the the road to recovery. Knowing the deep down cause will be key for achieving "sobriety" in the future. Addressing the root issues of why you incurred this debt will most likely be the most beneficial exercise that can help maintain the effects longer term.
Freedom is the most fun
It's true - freedom is the best and think of how fun it will be to be completely out of debt so then you can start having more fun!