Getting into debt is easy, an emergency here an unexpected expense there and before you know it, you could be carrying thousands in debt. There are ways to manage credit card debt without having it hang over your head. The experts at Broussard Poché, LLP want you to take charge of your credit year-round.
Know Your Debt
You need to know the total amount of debt you are carrying across all accounts. Consider online tools and apps to help you keep track. Research any app you decide to utilize and make sure your financial information will stay secure
Avoid Long Term Interest
Don’t just pay the bare minimum. The point is to get your debt paid off quickly to avoid unnecessary interest charges. If you are only paying the minimum you owe it could take years or even decades to get rid of your debt. Depending on your interest rate, that means you will spending precious dollars on interest payments and not debt principle payments.
Debt Snowball Method
The Debt Snowball Method really works, thousands of people use it to get out of debt every year. Here’s what you need to do:
- List all of your debts from the smallest balance to largest (leave out your mortgage)
- Budget to pay the minimum payment on every debt
- Then calculate out how much extra you can put towards paying off your debt
- Pinpoint the debt with the smallest balance, pay the minimum PLUS you extra money
- When that debt is paid off, roll over all of that money into the next smallest debt (old amount +minimum)
- Repeat and keeping rolling over payments until all your debts are gone
Paying off debt can look daunting on paper, but once you come up with a budget and apply the snowball method, the task becomes easier to conquer. Also, consider filing your taxes early and putting that refund to good debt deducting use.