Like many other things in life, choosing how we pay off our debts is a highly personal choice. Getting into debt is easy, but getting out requires clever strategies that can help you conquer debt. There is no one strategy that will work for everyone, because debt is a very personal thing. Finding a rewarding way that works for you is the most important thing in paying off debt.
There are many strategies, some more effective than others. You need to be aware of how you spend money, save money, and where your weaknesses are in order to choose the most effective of the clever strategies that can help you conquer debt. Two. Finding the best match can be a process of trial and error.
A few common strategies
- Pay your debts based on what the smallest balance is
- Pay your debts on the most irritating bills first
- Pay from the highest interest to lowest interest
- Pay off the debts that do the least good first
These are all clever strategies that can help you conquer debt, but it is a personal choice in which one you’re going to use. Only you can choose the strategy that will fit best with your budget- you may not have to keep this as a choice, once some of the debts are paid off.
Choosing to pay off the highest interest rate debt may be good for you. All not only will this prevents interest charges, but if it’s one of your smaller debts, it may actually pay off in a completely first. This will free up more money for other debts, and help make the debt shrink. One reason you may not wish to use this is if this is an account that has a large effect on your credit, like a home or car loan: doing the math is the only way to insure that you don’t hurt yourself in the long run.
Paying off the smallest debts will make give you a sense of victory, and eliminate some of the worries that you may have about having so many debts. This one of the clever strategies that can help you conquer debt may give you the incentive to keep paying off the debt you have, and help you stay out of it.
And paying off the loans with the will that annoy you first may make more sense. Sometimes, these loans effect not our financial, but our personal strategy. Many times, having loans to family or friends feels worse than owing a more impersonal institution. Paying off these quickly may become one of your favorite of the clever strategies that can help you conquer debt.
Tools to use
Find ways to incorporate your chosen of the clever strategies that can help you conquer debt. Shifting a credit card balance to a new card, with an low interest introductory period may be just enough to let you pay off this debt. Read the fine print, of course. And don’t use the new card for any other purchases. Make sure you can pay off the debts all at the lowest possible rate, and don’t add more debt to what you need to pay.
Looking at your budget may allow you to find it a small expense, that you can use as a reward. Regardless of how clever strategies that can help you conquer debt, they are useless if you feel like you’re not getting anything back, so incentives may be needed. The thrill of paying of a debt can be its own reward- some people may need the extra incentive when it comes close to a special occasion to keep paying down their debts.
Something that is not mentioned often is to make sure that the debt you pay off stays personal. Paying off the bill just because it’s there doesn’t give me much of a sense of accomplishment, but knowing that I have paid off a couch, a video console, or a computer feels much better. Another section of this type of clever strategies that can help you conquer debt lets me think of additional interest as actual things lost: “If I don’t pay this off, the interest will be as much as going out to a movie.” This keeps me motivated to keep the payments up, and to avoid going back into debt.
As long as you are paying on your debts will, any of these clever strategies that can help you conquer debt will work. If you find yourself not able to make progress using one strategy, you need to take a look and see if a different strategy would work better for you. Keep looking, and trying different combinations. Once you have gotten yourself out of debt, you will have built good habits to avoid getting back into debt again.