Fiscal responsibility is challenging, especially for those dealing with debt. Sometimes the most effective way to get back on track financially is to start with a blank slate. Here are five ways to restore control of your finances and remove debt permanently from your life:
#1 Understand Your Debt
When in a significant amount of debt, more often than not, people turn a blind eye to their debt. They make the minimum payments, or they defer it to a later date not realizing that they are accruing a considerable amount of interest. When it comes to debt, you need to be aware of how much you owe, whom you owe, and if you can consolidate your loans into a smaller payment so that you can create a brand new budget to fit your financial needs.
Create a spreadsheet of your debt. Include the amount you owe, when it’s estimated you will pay it off, and the amount of interest you are accumulating. Being able to see all of your debt side by side allows you to physically recognize how much you owe.
From this point, determine how you want to pay it off. There are multiple options from paying the ones with the highest interest off first to starting with the smallest loans in order to decrease the amount of outstanding loans you have to using a balance transfer credit car in order to consolidate (if possible) loans to one lender. Jeffrey Weber of SmartBalanceTransfers.com states, “Balance transfer credit cards yield those in a significant amount of credit debt a chance to regain control over their finances by transferring their debt onto one card with a low interest rate.”
#2 Upgrade Your Credit Card
If you opt to use a balance transfer credit card, many of these cards offer a rewards system that can offer you cash back, gift cards, points redeemable for hotels or restaurants, and travel miles.
#3 Choose A Bank
Find a bank that is better suited to your needs. While larger banks are more convenient and usually do not charge ATM fees, smaller banks sometimes offer lower fees in certain areas. For the traveler, a larger bank is probably a smarter choice while someone who rarely uses cash should consider a smaller bank near him or her.
#4 Stop Paying For Unnecessary Items
If looking to overhaul your finances in order to save more than you spend, cut out the unnecessary, money-hogging items like cable bills, gym memberships, daily take-out, and morning stops at the nearest coffee shop.
#5 Retirement Fund
Most Americans have not yet calculated how much they will need to save for retirement, which leaves many people at retirement age without a sufficient nest egg to sustain them for their retired years. An online calculator can provide you with a fairly accurate number of how much you will need to save in order to have a comfortable retirement.
With just a few monetary changes, you can begin eliminating debt from your lifestyle in order to have a safe, stable financial future.