How to clear debt
- Thread starter jackpeter
- Start date
Jasz
VIP Contributor
Clearing debt is a difficult process, but it's not impossible. Here are some steps you can take to get started:
1. Take inventory of your financial situation. How much do you owe? What are the terms of your loans? Do you know where the money is coming from to make your payments? A clear picture of your finances will help you develop a plan.
2. Make sure you're living within your means. If you're not sure how to do this look at all of your expenses in a month and subtract that number from all of the money you earn in a month. The difference is what will be available to pay back your debts with, so if it's too small, you need to find ways to cut back on your spending, or find additional income streams.
3. Prioritize your debt repayment based on interest rates and fees, starting with the highest rates first educing those balances as quickly as possible will save you money by reducing the amount of interest charges that accrue over time.
4. Try to negotiate payments with your creditors or ask if they’ll accept lower monthly payments while you pay down the principal balance. They may say yes!
5. Ask family or friends if they can help with a loan during this time. If possible, offer a written agreement outlining the terms of repayment so there are no misunderstandings later on.
1. Take inventory of your financial situation. How much do you owe? What are the terms of your loans? Do you know where the money is coming from to make your payments? A clear picture of your finances will help you develop a plan.
2. Make sure you're living within your means. If you're not sure how to do this look at all of your expenses in a month and subtract that number from all of the money you earn in a month. The difference is what will be available to pay back your debts with, so if it's too small, you need to find ways to cut back on your spending, or find additional income streams.
3. Prioritize your debt repayment based on interest rates and fees, starting with the highest rates first educing those balances as quickly as possible will save you money by reducing the amount of interest charges that accrue over time.
4. Try to negotiate payments with your creditors or ask if they’ll accept lower monthly payments while you pay down the principal balance. They may say yes!
5. Ask family or friends if they can help with a loan during this time. If possible, offer a written agreement outlining the terms of repayment so there are no misunderstandings later on.
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