Debt Help | 6 Tips for Reducing Your Debt

6 Tips for Reducing Your Debt

Here are some tips to help you to reduce your debt:

1. Pay Your Credit Cards EVERY Month
Your debt shouldn’t be one of the things that is put off if you don’t have enough money.  If money is too tight, get a part-time job or work some overtime.  If you don’t even have enough money for bills and to pay minimums on your debt, then debt reduction shouldn’t be your goal, increasing your income should be the goal.  Be sure to pay the minimums on all credit cards and loans, preferably more.  Be careful not to spend all of your money paying off debt.  Make sure that you pay your other bills and can buy groceries and gas.  It’s not worth it using your credit cards every month to buy groceries because you don’t have enough money to buy groceries, because you paid more on your credit cards.  Can you see the lunacy?  Plus, you can incur more debt because we live in a world of late fees and adding $39 to your debt because you couldn’t pay the minimum is counterproductive to your goal of reducing debt.

2. Keep Track of Your Finances/Make a Budget
You need to find some way to keep track of exactly what you are spending your money on, and how much money you have coming in.  I wrote an article entitled: How To Make A Budget.   It breaks down the areas that you need to cover in your budget.  Once you know what you are spending your money on, you can see which of those areas can be cut out or cut down, in order to free up more money to pay down your debt.

3. Stop Using Those Credit Cards
Just stop… if you’re in a spot where you’re not paying your credit cards debts off each much, then just stop using them.  Will it be hard… probably, but it’s going to help to reduce your debt.  Tips that others have recommended are to put your credit cards in a gallon zip lock baggie full of water and freeze it, so that if you do have that urge to use your credit card, you at least have to wait and think about it while it thaws.  My suggestion is to just cut the credit card up.  That will reduce your use of the credit card by 100%.  By not incurring more debt, you can focus on reducing the debt that you do have.

4. Get Lower Interest Rates On Your Credit Cards
Although transferring higher interest balances to 0% or low percentage credit cards is a temporary fix, it can help.  Usually those promo interest rates only last for so long.  Plus, you have to make sure that you pay every month, or they can increase the rates on you plus charge you late fees.  Consolidating does have it’s benefits, as you have less payments to keep track of and you can get lower rates.  I wrote an article entitled: An Easy Way to Lower Your Credit Card Interest Rates.  Check it out for an easy tip to possibly get your credit card rate reduced.

5. Increase Your Income
The more money you have coming in, the more you can use to pay off your debt.  Whether it be a part time job, working overtime at your current job, or selling stuff on Craigslist or eBay, you can get some extra cash to pay towards your debt.  Especially, if you are wanting to/needing to buy something new. (New fridge, new camera, new TV, etc.)  Don’t just put it on credit.  Work some extra hours or sell some extra things, in order to buy that wanted or needed item.

6. Say NO to “Get Rich Quick” Schemes
Everyone wants to have more money, especially those of us who are in debt.  Get rich quick schemes are very prevalent because the possibility to get rich without much investment or hard work is appealing to almost everyone.  Don’t be one of those fooled by these get rich quick schemes.  Why spend money you don’t have or could put towards debt?  If someone found the sure fire way to make tons of money with little to no work and only 3 easy payments of $19.99, then everyone would be doing it.  Instead, put your efforts into doing something that will for sure pay you, like a part time job or working overtime.  It won’t cost you money (except gas) and you’ll for sure make an income.

By following these tips, you can definitely reduce your debt.  Will it take hard work and dedication? Probably… but it will eventually free you from the chains of debt.