Regaining Financial Control - Part 2 :Reduce your Debt

Loans, school fees, insurances, mortgages, credit card payments etc. can become extremely burdensome. At time so feel really overwhelmed, what can you do? Take a deep breath, get up and make an aggressive plan to reduce your debt. Commit to paying off one loan or your credit card entirely. You need to make drastic decisions that will get your from where you are (in debt) to where you want to go (financial stability). Here are few things that you can do to get there:

·         Sacrifice and pay extra to that loan monthly so you pay it off faster.

·         Set up a monthly Standing Order to pay off your credit card.

·         When that loan is paid off, you would no longer have to make that installment and would therefore have ‘freed up’ funds.

Do not go on a spending spree with those funds. Instead:

·         Decide on the next debt you want to pay off

·         In addition to your normal installment on this debt, also apply the ‘freed up’ funds from the last loan you paid off.

·         Save it instead. ‘Freed up’ funds can help you stay out of debt if you treat it right. Even a small amount as $300 a month can still help you in the future.

You will therefore pay off this next debt well before its maturity date. Continue using the funds that become available after paying off each debt in this way and you’re on the road to being debt free.