Debt. Loans. Ugh. I really don’t like to focus on the family financial situation 100% of the time, but to be successful in paying off any debt, I have to be. I have found that if I focus on any debt, such as loans that we have, we can begin to make great strides in paying off our debt. Below is a small guide on how you can pay off any loans you have with a little determination and planning.
Smallest Debt First
Let’s imagine that you have three loans. One you owe $300, one you owe $1,000 and one you owe $2,000. I have found that if you pay only the minimum payment on each loan, you will be paying on your loan seemingly forever.
Consider taking the lowest debt you owe and paying extra on it. You will pay this off quicker because it is smaller and you are paying more towards the bill. Once you pay the lowest loan off, move on to the next. In this scenario, you would pay off the $300 loan then the $1,000 only being left with the $2,000 loan in the end. Continue paying regular payments on any additional loans but be sure to pay more on the smallest debt to be able make headway.
Avoid Taking On More Debt
When we have a credit card payment or loan, we try to avoid taking on any more debt. We have credit cards that we use for emergencies such as car breakdowns. If we end up charging, let’s say $1,000 for a vehicle repair, then we will avoid taking on any more debt until this amount is paid. This way, we do not find ourselves getting into a hole financially that we cannot climb out of.
It is important to be smart when it comes to your financial situation. Do not live above your means. Do not take on more debt than you can afford. Be careful with what you charge on credit cards or how much you take out a loan for.
Consider why you are going to have this new debt. Is this something you really need? Can you truly afford the payment and pay off the debt in a quick fashion? By making smart decisions when it comes to debt, you will be able to feel good about your financial situation, without becoming overly stressed or owing more money than you can pay back!