A step by step plan for paying off debt
You may have debt from student loans, credit cards, holiday bills – or all of the above! And in today's tough economy, you may be wondering how you can turn things around. The good news is, many Americans are taking a fresh look at their budgets and taking steps to lower their debt once and for all.
Here are four steps that can help you take control:
Step one: Get everything out on the table.
Take a close look at your balances, your interest rates, and your required minimum payments. Taking a step back to see what you are working with can often give you the chance you need for a fresh perspective on creating a positive financial plan.
Step two: Come up with a payment strategy.
There are two philosophies on this one. Some experts say you should pay off smaller balances first, to get a sense of accomplishment. This can help keep you motivated. Others recommend paying off the debt with the highest interest rate first. This will result in the greatest savings. Choose the approach that will work best for you.
Step three: Adjust your lifestyle.
You need to stop accumulating new debt, which means you need to live below your means. If you want to be debt-free, you have to figure out how to spend less and/or make more. It's that simple. There are many online money management tools that can help you stay on track, like NECU's myMoney tool.
Step four: Stick with it.
Paying off debt is a long-term goal. So be patient. Set some smaller goals along the way, and don't give up!
Please let us know if there are ways we can help. Northeast Credit Union has debt consolidation loans, home equity loans, and credit card balance transfer programs with low rates and minimal fees. Call 888-436-1847 or stop by any one of our local branches to speak with a friendly staff member about solutions for your particular situation.