Almost everyone has some form of debt. Whether it’s debt from buying a home or car, student debt, or debt from spending too much on your credit cards, all of your debts are going to have to be paid back one way or another.
For most people, it’s the thought of having to pay off their debt that gives them some financial anxiety. But if you’re able to find a payoff plan that works for you, you should be able to pay down your debts faster than ever before.
To help you see how this can be done for yourself, here are three strategies to help you pay down your debts and avoid having to file for bankruptcy.
Change Your Spending Habits
If the debt you have accumulated is due to buying a modest home or car, then changing your spending habits likely isn’t the issue that got you into debt. But if your debt has grown because you’ve been living outside of your means in other ways, changing your spending habits is going to have to be the first thing you do if you want to get out from under your debt.
While changing your spending habits can be very challenging at first, especially if you’ve been building these habits over the course of years, David Weliver, a contributor to Money Under 30, shares that this is the only way you can ensure that all your hard work to pay off your debt will ever really make a difference in your overall debt ratio.
Pay As Much As You Can Toward Your Debt
Once you’re able to get your spending under control, your next hurdle is going to be knowing how to allocate your money toward your various debts. One strategy you might want to try, according to Allison Martin, a contributor to Money Talks News, is to simply put as much money as you can toward your debts.
As soon as you’ve paid off your bills, give every last penny to your debts. Any extra money you make should also go toward your debts. As long as you have some money saved in an emergency fund, you should be giving as much money to the paying off of your debts as you’re able so you can pay them off as quickly as you can.
Try The Debt Avalanche Method
Another strategy that can work for those trying to get out of debt fast is to use the Debt Avalanche Method. According to Sean Pyles, a contributor to NerdWallet, the Debt Avalanche Method means that you put all your extra money toward the debt with the highest interest rate. Once you pay that debt off, you then take the money you were paying on that highest interest rate debt and start adding that to the debt with the next highest interest rate.
By choosing to go with this strategy, you’ll be saving yourself a lot of money in the long run that you otherwise would have been paying toward interest on your debts.
If you’re wanting to find a way to help you pay off your debt fast, consider using the tips mentioned above to help you find the strategy that’s right for you.