This week on Money & Investing, Mitch Olarenshaw and I discuss 5 strategies for paying down debt.
We set out to offer practical advice for those facing economic pressures.
1. Consolidate Your Debt
The first step to tackling debt is consolidation.
By combining high-interest debt into a personal loan with a lower interest rate, you can save money and make payments easier to manage.
However, it’s important not to accumulate more debt—stick to a cash-covered system.
2. Understand Your Spending Habits
Reflect on how you ended up in debt.
Were your purchases necessary, or were they influenced by other factors like boredom?
By adjusting your spending habits, you can help prevent future debt.
3. Take on a Side Hustle
Earning extra income through a side hustle can help you pay off your debt faster.
Even a few extra hours each week can make a significant difference.
4. Talk to Your Creditors
Negotiating with your creditors for better terms can provide some relief.
Many institutions are open to working with customers during tough times, especially if you reach out early.
5. Avoid Common Pitfalls
Be wary of store credit and balance transfer offers.
These can seem helpful, but they often lead to more debt if not managed properly.
Stick to a disciplined repayment plan to avoid falling into these traps.
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