With the unstable economy and the rising costs of college, being in debt is relatively commonplace in America. In fact, USDebtClock.org shows that the average debt is $50,000 per U.S. citizen and a staggering $140,000 per taxpayer. Although you may not be alone, being in debt is a burden that you have to carry with you in your daily life. The relief that comes from paying off a debt is an incredible feeling that enables you to have more freedom with the money you work so hard to earn. To pay off your debt faster and limit the money you’ll spend on interest and other fees, consider the following four tips for making your negatives positive again.
1. Take responsibility
One of the most debilitating things you can do when facing a large debt is blame others or rationalize the problem. For example, “I wouldn’t be in so much debt if my spouse made more money” or “If these interest rates weren’t so predatory, I could have my debt paid off by now.” If you want to proactively change your situation, you need to first understand that you are responsible for it. Although taking responsibility is never easy, it logically implies that you are also in control of the situation. Knowing that you have the power will help make your debt seem more manageable and give you the sense of control you need to tackle this major issue.
2. Use coupons
Having a stricter budget doesn’t mean you have to sacrifice buying your favorite items. The secret? Coupon clipping. There are tons of resources both online and even on reality shows like TLC’s Extreme Couponing that can help you master the money-saving art of using coupons. Couponing doesn’t have to be time-consuming either, since many stores now give out coupons along with each purchase you make. Get used to shopping on sale and try to use coupons on your most essential purchases to meet the demands of your budget and direct your savings toward major debts.
3. Put all unexpected surpluses toward debt
Just got your tax return in the mail? Generous Uncle Joe write a big check for this year’s Christmas present? Find $20 in the pocket of some old jeans? Put it toward your debt. This may not be your initial reaction when receiving an unexpected monetary surprise, but making this sacrifice now will enable you to enjoy more of your own money and more of these surprises in the future. Any surplus funds that are not needed for immediate expenses can cut off months–maybe even years–from the time it will take you to pay off your large debt.
4. Make more frequent payments
If monthly payment figures seem overwhelming, try paying off your debt once a week or even once per day. Ten dollars a day is a small amount to ask for most people, but with this small amount you can pay off an $8,000 credit card in just three years. If you’re used to spending at least that much on lunch every day, try to make this loss less noticeable by packing your lunch and limiting any non-essential purchases you make in a day. This might mean you have to sacrifice your Starbucks in favor of the break room coffee pot during the weekdays.
The tips above will help you enjoy the carefree nature of debt-free living, but they should be applied according to your personal needs. Before you commit to paying off your debts, make sure you know exactly what your debts are and what your budget limitations might be to create a functional plan. Once you have these figures down, applying the steps listed above can help you gain a clear picture of how and approximately when you’ll have your debts paid off, which is a huge motivational factor to get your started toward this ultimate goal.