Paying off Debt
Looking to pay off some debt but don’t know where to start? Well, you can start right here! We’ve compiled a few of the most effective strategies for taking a bite out of your debt, and we’ve done our best to explain them as simply as possible below.
Before we get to the strategies, let us remind you, you are not alone and it will be ok! Carrying debt often comes with a huge mental or psychological burden, and too often people suffer in silence. Our goal is to help you get out from that burden and realize that it is ok to ask for and receive help. If you are ever feeling like you have nowhere to turn or are at wits end, please do contact one of the many great credit counselling or mental health services available for support.
Now, onto the strategies!
1. Consolidate your debt on the lowest interest rate line. If you have multiple debts (student loans, credit card, line of credit, etc.), you can usually merge those debts into one on the line of credit, or which ever option has the lowest interest rate. By doing this you will save hundreds or thousands in interest payments, and also will have less debts to keep track of. In the case of consolidating on a line of credit, you would use the line of credit to pay off the higher interest debts, effectively transferring them.
2. Apply for a low or zero rate credit card. If you currently carry a balance on your credit card, and the interest rate is high (it usually is), it is definitely worth applying for a lower rate card. Sure, you could ask your current provider for a lower rate, but often we find switching cards to bring the biggest benefit. You can then use the money saved in lower interest to speed up paying off the card.
3. Sell some stuff and use the proceeds to pay off debt. If you really want to make a dent in your debts, you need to find some new money to put towards them. What better way to do this than to sell some stuff you don’t need? That dusty video game collection or unused weight machine could fetch you hundreds of dollars. If you want to take this point to the extreme you could even consider something “crazy” like selling your car and becoming an urban cycling champion!
Being under a mountain of debt can feel completely overwhelming, and it’s often hard to see the light of day. However, if you start with these small actions, you will be amazed how quickly you can notice an improvement in your situation.
If you’d like some additional support with making a change, please setup an initial connection meeting with us and learn more about how Finovo can help you get better control of your finances.