Article by: Chris O’Shea
Digging out of debt can seem overwhelming, but don’t let that stop you from developing a plan. Like many things in life, you can take small steps to arrive where you want to be. Here are some basic moves to climb out of debt.
Prioritize
The best way to pay down debt is to attack the debt with the highest interest rate first. Once you get that debt paid off, you move on to the next highest interest rate. Interest rates are killer, taking the highest out first will free up money faster.
Brave Your Budget
You need to squeeze as much money out of your budget as possible. That means getting tough on your monthly spending. Cut back on as many expenses as you can. No, this won’t be easy. But keep in mind that it’s temporary. Once you pay down your debt, you can revise your budget once again.
Make a Call
A phone call can go a long way toward paying down your debt. Simply call your lenders and ask about any available financial hardship programs. Many lenders, especially now during the pandemic, will be willing to work with you on a payment plan.
Get Automatic
Once you get a handle on your debt, make savings automatic so that the circle of overspending doesn’t continue. If you have a solid emergency fund and a sizable savings account, you’ll be less likely to go back into debt down the road.\
Consolidate Your Debt
The thing that some people struggle with the most is being able to juggle multiple debts at once. This often results in missed payments, which also means late payment fees on top of high interest. This is an absolute killer. Consolidating your debt means that you combine all of your debt together, and pay for all of it on the same day…. with one fixed payment amount… at a fixed rate! UKRFCU offers just that to our members in a few different options. Consolidate your debt with UKRFCU through:
- Home Equity Loan – For those who own a home with equity in it. Great low rate!
- Personal Loan – Most traditional way to consolidate your debt!
- UKRFCU VISA Credit Cards – For those who want to roll over the balance to a lower rate.
Read the full article here.