The Best Way to Save Money Is Getting Out of Debt
Do you know how much you’re paying in interest charges every month? Banks, credit card companies, and other lenders rely on borrowers like you who carry balances on their credit cards, lines of credit, and other loans. Without interest, they wouldn’t have an incentive to lend money.
But it costs you, and probably more than you think. Carrying a credit card balance is one of the most expensive things you can do without getting anything back for it. It makes everything you bought with those cards more expensive over time.
If you’re ready to start saving, the first thing you need to do is get out of debt. Here’s how you can start.
Assess the Problem
First, you need to know exactly how bad it is. You can use a debt repayment calculator to figure out how long it will take you to pay back each individual debt at the current interest rates and the size of your monthly payments. You can also book a financial assessment with a certified Credit Counsellor from a non-profit credit counselling agency.
The results may show a shocking truth: you’re paying a lot in interest. Expensive rates make unsecured loans profitable for credit card companies.
Find Debt Solutions
You don’t have to pay everything back without any help. One of your possible debt solutions is credit consolidation in the form of a Debt Consolidation Program.
The purpose of debt consolidation is to simplify your payments and cut your interest rates. You can get a debt consolidation loan, but you can’t qualify for one if you have bad credit.
One form of bad credit debt help you can get is credit card debt counselling. A certified Credit Counsellor will help assess your finances, negotiate lower or stopped interest rates, and get creditors to agree to stop collection calls. They help you work out a budget that will allow you to repay all of your creditors, saving you money and putting you on track to debt freedom.
Stick to Your Budget
The next step is simple, but it may take willpower. You have to stick to your budget and take advantage of those savings on interest charges. Put those savings toward the principal, and you’ll be out of debt even sooner.
Enjoy a Debt-Free Life
You’ll be amazed how much more money you have when you’re not stuck paying down credit card bills every single month. When interest has a chance to grow on your debt, that’s more money coming out of your pocket and going to the bank.
Debt-free living feels completely different. One thing that happens is that cash builds up quickly. Unless you suddenly decide to make some major lifestyle changes when you pay off your last dollar in debt, you can start saving, and you’ll do it quickly. All that money you used to put toward credit card payments goes straight back into your pocket.
When you become debt-free, you have less stress. You have more breathing room for surprise expenses. You have more choices about what to do with the money you have.