Top Tips to get debt-free in 2024
A new year has begun and no one wants to spend the next 12 months feeling stressed out about their debt. Thankfully, there are some simple steps you can take TODAY to begin paying off your debt. Check out our top 6 tips to get debt-free in 2024!
Create a monthly budget and stick to it:
Do you know where every dollar you earn has been spent? You should! Many people hear the word “budget” and cringe. It’s feels restricting. But a budget is actually freedom for you! It means no more confusion. No more wondering where you spent your last pay check. By creating a budget, you know all of your bills are being paid, you are saving money and you know how much you have left to spend on the fun things in life. Be sure to write down where you are spending your play money. Did you spend 90% of your fun money on clothes and now you don’t have money to go out with friends for dinner? Check out this post on creating a budget from our partners over at Sallie Mae to get started.
Change your spending habits:
You’ve created a budget that will help you reach your goal of paying off debt; now it’s time to implement those changes. We know… this is the hard part. But just take it one step at a time. Stick to your budget and you will see success that will lead to more success! For the first month, try out the spending freeze challenge! This is a great way to jump start good spending habits. A spending freeze challenge is when you “freeze” or stop all extra (non-essential) spending for a specific period of time with the goal of saving that extra money. Our employee tried this and saved an extra $400 that month!
Pay more than the minimum or monthly fee:
One of the fastest ways to pay off debt is to pay a little extra every month. When creating your budget, find places where you can move money toward your debt. Every little bit counts! You can also “snowball” your debt payments. This means you focus on one payoff at a time. You would pay your normal or minimum payment on all of your loans/debts but one. You pour all of your extra money on that debt payment. Once you pay it off, you move to the next one. And soon, you will have them all paid off.
Increase your income/ Decrease your expenses:
Simple put, you need to either earn more and/or spend less. If you can pick up a part-time job, that is a great way to pay off debt quickly. You would funnel all of that extra money toward your debt payments. For some, picking up a 2nd or 3rd job is just not an option. In those cases, you can go back to your budget and see where you can decrease your expenses. Some areas to look first: Entertainment and food budgets. Can you cut back on cable/Netflix/ and going out to dinner? Have you considered shopping at discount grocery stores? This is a GREAT way to cut back on your grocery bill! One of our employees recently compared her monthly grocery bill with her friend. They both are feeding a family of 4. One shops at the main grocery store in town and the other shops at discount grocery stores such as Sharp Shopper. She supplements at the large grocery chain as needed. The friend shopping at discounts stores spends between $400 – $600 a month on groceries. The person shopping non-discount spends between $800 – $1200 a month.
Consolidate your debt:
If you are carrying a lot of debt and just don’t know where to begin, start with our expert loan staff. Contact the credit union to discuss your situation and see how you may be able to consolidate your debt to pay it off faster.
Transfer high rate credit card debt to a low-rate credit card:
Are you carrying a high credit card balance? Consider transferring that balance to a low-rate credit card! Many credit unions, banks and credit card companies are offering balance transfer specials right now, including YOUR credit union. Transfer your high balances over to our VISA card and pay only 3.99% APR* for the lifetime of your transferred balance!
When comparing deals, be sure to look for a card with no or a low annual fee. Our VISA card has no annual fee. Also, check to see what the rate will revert to after the intro period. You will either need to pay that balance off within the intro time frame OR look for options to transfer to another low-rate card.
We love the old saying, “How do you eat an elephant?” One bite at a time!” You CAN get debt free and we are here to help! Just take one step at a time!