Eliminate Debt With These 3 Easy Tips

1. Set Up Automatic Payments

Some of us can be rather forgetful. Others? We’re just pushed for time. While some, even, just don’t want to face up to facts. It turns out debt can elicit a number of responses in us, with the most common being ‘ignore it and it will go away’. Or, to put it another way,

‘What I can’t see can’t hurt me!’

As much as we might all want to believe it, ignoring debt won’t make it go away. It just makes the situation worse. Skipping or missing repayments can lead to late fees and other penalties which can build up over time, and result in you paying more than you need to.

To combat this? Get in touch with your bank or credit union and set up automatic payments to your credit card or your creditors. Not only does this remove the possibility of you forgetting to make your payment, but you’ll also no longer be able to drag your heels. Your debts will end up being paid on time, all the time, and any late fees and penalties will be a thing of the past.

2. Target high-interest debts first!

Here’s the deal: the higher the interest rate, and the longer you have a loan, the more you’ll end up paying. Take a simple $10,000 loan, for example. Charged at 20% and paid at $200 / month, this loan will take close to 10 years to repay, and cost you an additional $12,000 in interest over the life of the loan. That’s a lot of money! 

Most would just accept this as a fact of life. But it doesn’t have to be. Here’s how you can fight back against that interest:

Start off by making a list of your debts, and then then order these by interest rate from highest to lowest. From here? Continue to make minimum repayments on the lowest rate loans, but make savings where you can and redirect as much of your spare cash into those with the highest interest rate. 

By eliminating these debts first, you’ll cut down on the amount you end up paying in the long run, and make your financial life easier in the short term. This approach is known as The Stack Method (explored further here), and it makes paying off your debts quicker, easier, and cheaper! 

3. Ask For Help

‘Two heads are better than one’

‘Many hands make light work’

The proverbs relating to teamwork are endless, and they apply to debt perfectly!

So do it, ask for help! 

Jump onto Google, for example, and throw in your problem. 'Struggling with debt', 'get out of debt' or even 'i need help with debt'. What do you find? Chances are, Google will give you a bunch of sites full of tips, ideas and advice. There are entire forums and communities devoted to helping you work your way out of debt. The community at DebtConsolidationCare, for example, is super helpful and full of advice. While the likes of Money Crashers features numerous articles, guides and tips. 

Elsewhere? Look for local support groups within your community, Facebook groups, or even local government departments. There’s often a bunch of these full of people willing to talk with you and lend a helping hand.

Once you’ve decided how you’re going to deal with your debts? Consider your options. Send out feelers to a number of institutions, and see what the response is like. It may be more efficient, for example, to settle your debts. Maybe the pros of debt management outweigh the cons in your situation? If your loan is over 6 years old, maybe look into ‘Statute Barred’? Or maybe you could consider the pros and cons of all of these debt methods vs the idea of debt consolidation? However many debts you have, there’s an option out there for you.

So that's it! 3 easy tips you can implement today to start eliminating your debt. 

Looking for more tips? Check out other posts from the GiffGaff community: https://www.giffgaff.com/money/ 

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Representative example for a loan of £4,000 for 24 months at an interest rate of 15.5% APR fixed. In this example the total amount payable (including interest and fees) would be £4633.57 and your monthly repayments would be £193.07.

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Posts on this site reflect the opinion of the members posting only, and not necessarily giffgaff’s opinions or views. There’s a lot of information here that can help you, however, you must remember that we operate an open forum and sometimes messages that are posted are misleading, deceptive, or inaccurate. If you follow these tips, you do so at your own risk. Always do your research and check the terms.