Debt can feel overwhelming and seem to grow exponentially as time goes by. The key is to stop adding to it and start paying it off as fast as you can. That way, you can take control of it and work toward a debt-free future.
Here are five simple and effective ways to tackle your debt and regain your financial stability.
1. Make a budget
Start by tracking your income and expenses to understand where your money’s going. Find areas where you can cut back and redirect those savings toward paying off your debt. A budgeting app like Brigit1 can make this super easy.
2. Prioritize your debts
Use a strategy like the debt snowball (paying off smaller debts first for quick wins) or the debt avalanche (focusing on high-interest debts to save on interest). Choose the one that motivates you most and stick to it.
3. Negotiate lower interest rates
Contact your creditors to see if they’ll reduce your interest rates. They’re often willing to do this, and it can lower your monthly payments so you can put more money toward paying off debt faster. They’re more likely to work with you if you have a good payment history.
4. Consolidate your debts
Consider consolidating multiple debts into one loan with a lower interest rate. It simplifies your payments and can save you money on interest. Some of the most common debt consolidation options are personal loans or credit card balance transfers. They usually give you 0% or a very low interest rate for a set period of time. Be sure you can pay it off within that timeframe because if you don’t, you’ll often get hit with a very high interest rate.
5. Increase your income
Boost your debt repayment efforts by earning extra money. Look into side hustles, freelancing, selling things you’re not using, or taking on overtime at work. Even small amounts can help speed up your progress.
Brigit’s biggest tip: Avoid. New. Debt.
While you’re paying down existing debt, you’ll want to avoid taking on new debt—that’ll dig you in deeper! Use cash or debit for purchases and focus on building an emergency fund to avoid relying on credit in the future.
1Brigit monthly subscription may apply; ranging from $8.99–$14.99. Cancel anytime.
