A popular New Year’s resolution is paying off debt. A new year offers people a brand new to start to get their financial situation together. But many people wonder where to start to get themselves out debt. Here are 4 tips to help you get started start on living a debt free lifestyle:
- Make A List of All Your Debts- The first step in getting out of debt is to tally up each debt you currently have. Take a look at your credit report to ensure you didn’t miss any. Figuring out your debt grand total will show you exactly how much debt you currently have and how you can make a plan to tackle it.
- Pay Off Debt Smallest to Largest- This is also known as the debt snowball. The reason this works with a lot of people is because it gives you momentum. When each debt is paid off you start to see progress and builds momentum to pay off the next debt.
- Start A Monthly Budget- Starting a budget is a great way to figure out where your money is going to each month. Do you know where every dollar you spend is going? Most people do not and this will help determine that. If you realize that you are spending a lot on going out to eat or getting lattes every morning, you can make adjustments that can give you more money to pay down your debts.
- Live Within Your Means- Spending less than or equal to the money you bring in every month means you are “living within your means”. By spending no more than you bring in each month, it will ensure you do not go into further debt. By making this small change, you can change your financial situation and no longer live paycheck to paycheck.