6 Tips to Help You Pay Down Your Debt in the Next 52 Weeks

pay down your debt in the next 52 weeksIf one of your New Year's resolutions is to get out of debt, good for you! But no matter how big or small your balances might be, you're probably a bit flummoxed when it comes to how and where to begin. Don't worry, you're not alone!

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Cameron Huddleston, Life + Money columnist for GOBankingRates.com, offers her top six tips that are sure to put you on the path to achieving your goal and living debt-free by the end of 2016!

1. Figure out your total amount of debt.

Coming to terms with the full amount of your debt can be scary, but it's the only way to truly start the process.

"The first thing you should do is figure out the total amount you owe and how much you need to pay each month to wipe out that debt in a year," Huddleston says. "It sounds so simple, but it’s a step people often fail to take. Instead, some of us assume that paying a little more than the minimum is what’s needed to make our debts disappear. But if you owe a lot, your monthly payments might need to be two to three or more times the minimum -- because just making the minimum payments is a recipe for being stuck in debt forever."

2. Really read those credit card statements.

Wondering how much your monthly payments should be to eradicate that debt? Try using an online calculator like the Credit Card Payoff Calculator at Credit.com, or, simply read your credit card statement.

"The CARD Act requires credit card issuers to tell cardholders on their monthly statements how long it will take to pay off what they owe if they only pay the minimum and what the total cost of paying the minimum is," Huddleston says. "Statements also must include how much consumers must pay each month to pay off their bill in three years. So, if you want to pay off your debt in one year, you’ll need to pay two to three times as much each month."

3. Revise your budget.

Paying off your debt is a wonderful goal, but unless you win the lottery, that extra money you'll be putting toward your bills has to come from making some sacrifices.

It makes sense, but where should you begin?

"Consider eliminating cable TV and taking advantage of free or low-cost TV and movie-streaming services, such as Crackle, Hulu, and Netflix," the personal finance guru suggests. "Reshop your auto insurance -- you’ll likely find that you can get a better rate from another insurer. Or, boost your deductible to lower your rate. Cancel subscription services you’re not using. Switch to a no-fee checking account; plenty of online banks offer them. Make restaurant meals a treat rather than a regular occurrence."

While it's not always easy, think of how good you'll feel when you're debt-free!

More from The StirAll the Feelings You Have After Paying Off Your Credit Card (GIFS)

4. Out with the old.

"Look for things you can sell on Craigslist, eBay, or at a consignment store –- clothing in good condition, furniture that’s taking up space in your garage, or electronics, which can be sold at sites such as Gazelle.com," Huddleston advises. "Then, put that extra cash toward your debt."

Easier than picking up a part-time gig, right?

5. Lower your interest rates.

"If you have a good credit score, look into balance transfer offers with a zero percent introductory rate," Huddleston recommends. "Not having to pay interest can dramatically lower the amount you owe and help you pay off your debt quicker."

6. Lock up those cards!

If had to pay cash for everything, you'd probably purchase a whole lot less, right? Why not give it a try in the new year? Huddleston says this is her most important tip:

"Put your credit cards away. Don’t carry them with you so you won’t be tempted to use them," she says. "And every time you think about buying something, ask whether it’s worth racking up more debt or staying in debt longer to have that item."

Great advice. Here's to starting 2016, with more cash in your wallet and no debt!

 

Image via bacho/Shutterstock

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