Dollar By Dollar: The Debt Reduction Plan That Gets Results
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When you’re in debt, it’s only natural that you may feel like you’re never going to get out of it. But you will. It may not happen overnight, and you’re going to have to really work to make it happen, but you can get there. Feeling financially free isn’t something reserved for the elite. It’s something that anyone can enjoy if they want it enough. So, we’ve established that you want to make it happen, but how do you go about it? Well, you need a plan that will work. Because this isn’t something that you can just try to do off the cuff. You need a system that will get you to pay everything off, dollar by dollar. So let’s see if this is what can save you.
Work It All Out
To make this work, you have to start off on the right track. This means breaking everything down and working out where you are with the money you owe. Create a written budget to assess your current financial situation. Whether we’re talking student loans, credit cards, a mortgage, or any other kind of debt, you need to get out all of your paperwork. Then start to break down what the amounts in total and the rates of interest that you’re paying. Make a spreadsheet and document the top line figures so that you’re clear on what needs to be paid. I’ve created a free debt snowball spreadsheet that will tell you how many months until you’re able to be debt free. Click the button below and I’ll send it right over!
Plan From Top To Bottom
Next, you need to make sure that you’re starting to pay things down. Call up your lenders and see if you can get a better rate of interest. Whether you can or not, you’ll want to weigh your options and then start to pay off the debt with the highest interest rate, as this will save you money in the long-run. List your debts in order from the highest to the lowest rates, including any promotional rates and the dates they expire. This is then your plan for paying the amounts off. This is called the debt avalanche. This post explains the differences between the debt snowball vs debt avalanche in detail.
Now, you may realize that when you’re paying off what you can afford to each month, whether it’s the minimum payment or more, you will get an estimate of how long it will take you to pay it off. If you want to do this sooner, then you’re going to want to side hustle. Think about getting a second job to help you make extra payments. You could even start a money-making blog like this one! There are so many options available to make extra cash.
Exhaust Extra Avenues
At the same time, you’ll also want to think outside of the box to exhaust all of the financial avenues that you have. If you know you could be due a payout, go down this route with someone like Greene Broillet & Wheeler, LLP to see whats due. Then use the money you get from these avenues to make extra payments.
Above all else, you really need to make sure that you stick to your plan. Make those monthly payments without fail. Extras should stay extras and don’t count as cutbacks on other amounts that you’re paying. That way, you’ll be able to reduce your debt in no time at all.
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