With the New Year just around the corner, a lot of people are busy making those annual
goals and resolutions. And for many, improving their finances is at the top of the list.
Getting out of debt can be a big and almost overwhelming goal. It’s not a fast process
and it takes a lot of dedication, but it is worth it in the end!
So where do you begin?
First start by getting an accurate picture of where you stand. Gather up all of your
recent debt statements. This includes credit cards, car loans, student loans, any
personal loans or other big ticket items, and your mortgage.
Run your credit report. You can request a free copy every year at
www.annualcreditreport.com from all three credit bureaus. This is a great time to check
for any mistakes and make sure that every debt on your credit report is included in your
Make a debt payoff plan. Create a spreadsheet with all of your debt information.
Include the name of the debt, total balance, interest rate, and minimum payment.
The best method around for paying off debt efficiently is the debt snowball where you make minimum payments on all debts except your smallest debt, which you put all your extra money towards. Here’s the trick: Once you pay off your smallest debt, combine that payment with the second debt. Now you’re paying a lot more than the minimum and it just keeps growing as you go!
Look for ways to keep throwing money at your payoff. Sell unused items around the
house, have a yard sale, clip coupons, or get a part-time job. Just do whatever it takes
to keep your momentum up!
Get the whole family involved. Make getting out of debt a family goal! Put your payoff
on the fridge and count down. Let the kids help with the family budget. When everyone
understands what you’re working toward, they’ll be more likely to cooperate when the
budget is tight.
And how can you find a few extra dollars toward your debt payoff? Save on your
monthly insurance costs! We can help. Call us at 360-452-9200 for a quote on your auto, home and life insurance today.