It is a good idea to look for debt relief tips that will help you get your New Year started right. According to reports, 6 out of 10 Americans believe that their debts will keep them from reaching their goals next year.
That means if you want to improve your financial position next year, you need to focus on getting rid of your debts. Unless you do, your limited financial resources will be tied up to your credit payments. Instead of using that to improve your finances, it will only be making your creditors and lenders richer through the interest you pay.
This is why getting debt relief tips before the year ends is a good idea. So what can you do to make sure you can achieve debt freedom next year?
Debt relief tips to start your New Year right
Here are some of the basic yet effective tips that will make debt relief successful.
Evaluate our debt relief program
This is only for those who already have a debt relief program in place. Just because you already started one, that does not mean you cannot change it. Ideally, you should stick to it. But there are unforeseen circumstances that may change your financial situation so much that it affects your debt payments. When this happens, you might be better off changing the program that you are in.
For instance, you started with a balance transfer. Unfortunately, you were unable to pay off your whole debt before the promo period expired. From a 0% rate, you are now facing a 19% interest rate on the balance that is left in your account.
Fortunately, there are many options to consolidate debts. You can borrow a personal loan with a lower interest rate to pay what remains from the balance transfer card. This can protect your debts from the high-interest rate of your former debt relief program.
The debt relief tips that you should consider will depend on your specific financial situation.
Update your repayment plan
If you think that you can still use the same debt relief program, you should focus next on the monthly payment plan. It is time to update your repayment plan.
What you need to do is to look at your budget plan first. A lot can happen in 1 year. You might have a bigger income. It is also possible for you to have a different set of expenses. The bottom line is, you need to check your budget and update it so it is aligned with the changes in your life.
Once that is done, you will check if you need to make changes with your repayment plan. Ideally, you want to find a way to increase your monthly payments. That way, you can pay off your debts faster. In case you end up with a lower debt payment fund, you can reevaluate your expenses and see where you can save more.
Set up a support system
This may seem like an embarrassing task but it has more merit than you realize. The support system that you will set up will help motivate you to complete all your debt payments. They can help you make the sacrifices that you need to make sure you meet your debt payments. This can be in the form of your friends who will initiate cost-friendly get-togethers so you do not have to spend money. Or it can involve your family who will help lower household spending to support your monthly debt payments.
This support system can only be one person who you will trust to give you sound debt relief tips. This person will be your confidante who will encourage you through tough financial times.
Get help from an expert
If you noticed that despite your debt relief efforts, your debt still had very little progress, it may be a sign that you need a debt expert. Make sure that you choose the right professional to ask for help. Check if they are legitimate by scrutinizing their affiliations and memberships. If they are a part of a reputable organization and are rated high by the Better Business Bureau, then you can consider them for the job. Look for a debt expert who will not ask upfront fees and are transparent with their pricing. There are debt experts who are sincere in helping people get out of debt. You just have to find them.
How to completely pay off your debts next year
Of course, debt relief tips will only get you so far. You still have to implement the tips that you know will benefit you. You still have a long way to go when it comes to becoming debt-free. So if you want to reach that financial situation, here are some tips that you can use.
Believe in your abilities to be debt-free
First and foremost, make sure that your mindset is in the right place. Know that even if you got yourself into this financial mess, you can get yourself out of it. No matter how hard, believe that you can do it for your own future. Admittedly, getting out of debt will be hard. This is why you need to consult a lot of debt relief tips to succeed. But your success will really start from within. As long as you believe that you can really get out of debt, it will forever stay as your motivation to make one payment after another.
Prioritize your debt payments
You should also make a commitment to prioritize your debt payments. There are things that will happen in your life that will threaten this fund. But unless it is an emergency that will compromise your health or your source of income, do not touch your debt payment fund. Sacrifice other expenses but not this. It will benefit you more if you prioritize your debts.
Use debt wisely
It may be unusual to have this as one of the debt relief tips but this is actually one of the most important. We cannot stop using credit. It makes purchasing convenient. This purchasing tool gives us a level of protection when we shop or make any transactions online. There is nothing wrong with us continuing to use it, but it has to be done in a smart way.
Take the holiday spending as an example. People have admitted that they will be spending more this year and some of them plan on using their credit cards. But guess what? As it turns out, 41 million Americans are still paying for the credit card debt they accumulated last year.
If you have plans of using credit this holiday, do not abuse it. Make sure you have a plan to pay it back. That way, it will not take you more than a year to pay it back. Use credit only if you know you have the resources to pay it immediately. And every credit purchase should have a purpose – and not to satisfy an impulsive buy.