Sneaky Tricks to Reduce Debt
Use Your Savings Account
If you have a savings account but have credit card debt, PAY IT OFF! Having $5000 in a savings account but having $3000 in credit card debt is the same as having $2000 in savings, except only one of these is racking up a meaningful amount of interest in the wrong direction. Pay off that debt and start fresh with your savings account. Rip off the bandaid - I promise you, it will feel so good to have that debt gone.
Snowball!
Start tackling the smallest debt first. If you know me, you know I L-O-V-E Dave Ramsey and have used his “snowball” method in my own life and tout it as one of the simplest and most effective debt tricks. Snowballing involves lining up your debt in amounts from smallest to largest and tackling the smallest amount first. Once you pay off one, move onto the next smallest and boom! You’re on a roll! It’s much easier to focus your time and money on one thing at a time instead of paying little amounts toward every debt.
Repurpose Unplanned Cash Inflow
Use raises and bonuses as an opportunity. Instead of using a raise to adjust your standard of living, keep everything the same and set up auto payments to your debt using the extra cash. You won’t even miss it! Likewise, use a bonus as a payment toward debt. You deserve that hard-earned bonus just like you deserve to be debt free!