Easy Ways to Payoff Your Debts

You are not alone! The average American has about $80,000 in debt currently excluding home mortgages. Unexpected or unplanned debt such as medical bills or credit card balances can be a tipping point into financial insecurity. 

If you have too many payments every month, you might get behind on other financial goals; but don't worry, here we provide easy and effective ways to start paying to your any outstanding debts earlier and build financial stability. 

Try to make as much progress every month on reducing your debt. It takes a little organization up front, plus a strategy that fits your budget and your preferences.

These steps can help

1. Make lists of all your outstanding debts

Before you start paying off debt, tally how much debt you have. Make a list with this information for each bill you owe.

The details you need to know about every debt:

• Debt name/account
• Type of debt (credit card, student loan, etc.)
• Balance
• Interest rate (some debt is more expensive, i.e., has a higher interest rate, than others)
• Payment terms/length
• Minimum monthly payment

2. Pick a debt repayment strategy

In general, there are three debt repayment strategies that can help people pay down or pay off debt more efficiently.

1. The snowball method

Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. A quick payoff is a quick win and can be a confidence booster. 

2. Debt avalanche 

Pay the largest or highest interest rate debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next smallest debt. Paying off a big debt can boost a feeling of control and gets rid of big interest, too.

3. Debt consolidation

Combine debts into a single account. Avoid any other debt until post-payoff. Possible lower interest and one account increases focus.