Steps Two – Onwards
After getting organized and creating your basic plan, follow it up with solid execution. These additional tips can help make the progress towards paying off debt go much faster. Choose and implement any of the following:
- Automate your debt payments, making sure that you keep your total payments at least as high as the amount needed to execute your payment plan. Automating it makes it less likely that you reduce your payments and fail to reduce your debt.
- Avoid eating out – it costs a ton
- Create a budget for all of your non-debt expenses. Trim out everything but the bare minimums and turn that savings into direct payments towards your debt pay down.
- Use free or low-cost recreational and entertainment options only. They are limitless and everywhere.
- Build up a cash reserve for emergencies equal to three months of basic expenses: housing, food, and transportation.
- Create a short-list of arguing points why your interest rates should be lowered. Next use the list as a script and call each of your lenders, haggling with them to have your rates lowered. If you aren’t getting anywhere with the level one representative, ask to speak to a manager, and repeat the same points.
- Transfer your balance to a new credit card with a zero percent rate, then cut up the new zero percent card and never use it, turning the credit card into a credit tool. Shop around and find a zero percent balance transfer option that has the longest zero percent period available. Note the end date of the zero percent period and make that your deadline to have that account cleared.
- Stop adding any new funds to investment accounts, retirement or otherwise, and apply those funds instead towards debt pay down.
- Make a checklist of everything to review during your time paying down debt, then use the list to check your progress on the first of every month. Compare your outstanding debt amount at that point to what it was on the first of the previous month. Adjust your plans to make sure that steady progress is actually a fact.
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
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