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Straightforward Ways to Get Out of Debt

In a period of high inflation and interest rates, it’s more important than ever to kick down debt and build up savings. Research from Debt.com found that 35 percent of people owe more debt than they have in their emergency savings.

This makes it all the more vital to take stock of your debt today. Before you can start, you need a clear picture of your situation. Then you can figure out the best way to get out of debt for your situation.

Comb through your accounts and get an accurate assessment of what you owe. Take note of the debt amount, interest rates, and how many payments you’re behind on.

Add Up Your Debt

Review your credit and budget

With your up-to-date credit report, you can gauge what kind of debt repayment plans you might qualify for. And when you write out your budget, you’re more likely to spot areas where you can be more frugal.

Once you know how the money you have coming in compares to what you owe, you can devise a perfect plan. And if you read this list and aren’t sure, it’s always a good idea to talk to a financial adviser. They can help go over your finances and help you find the best option.

Pick a Method of Attack

Snowball vs. Avalanche Method

To use the snowball method, list your debts from smallest to largest. Start by paying off your lower debts, then slowly work up to the larger ones. For example, if you have a credit card with $1000 on it and a bill in collections worth $200, focus first on the collections bill.

Consolidation is a type of debt refinancing that puts everything you owe into one account. This is perfect for people with multiple debts and high-interest rates. Paying interest on one bill could be much cheaper than paying on numerous.

Consolidation

Regardless of how you plan to tackle your debt, only making the monthly minimum payment won’t help you. It could just result in more debt because of interest. Always pay above the minimum; when you can, it’s a great idea to make multiple monthly payments.

Make Multiple Payments

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