Small Steps to Reduce Debt

Veola Zeller By Veola Zeller, 5th Dec 2013 | Follow this author | RSS Feed
Posted in Wikinut>Money>Debt

If you find yourself drowning in debt, it can be hard to recover. Become more financially responsible and make an effective plan that allows you to slowly reduce the amount you owe. We have some useful suggestions that will help. Read on.


There are many people struggling with debt. The stress of living from paycheck to paycheck and ensuring you can afford all of your monthly payments affects many areas of your life. Financial difficulties can make you become depressed and apathetic. If you feel overwhelmed, it becomes even more difficult to figure out how to best tackle the situation. With a little prior planning and dedication, however, you can develop a plan to get debt payments at a manageable level.

Showing an active interest in reducing your debt is the first important step towards being more financially responsible. If you keep blindly making your minimum payments each month, you will get nowhere. Create an effective plan that fits your budget and apply little changes to your lifestyle that will aid you in reducing your debt. We have some pointers for you, below.


Surprisingly, there are many people out there who aren’t even sure how much debt they are in. This “tactic” allows them to stay in denial and ignore their issues for far too long. Once you take an honest look at your financial situation, you will know where you stand and you can start making a plan. Figure out who and how much you owe. Get a copy of your credit report and use recent statements from your creditors to complete your list. Write everything down to get a clearer picture.


Rank your debts from highest to lowest, according to interest rate. The best way to repay your debt is to pay off highest interest rate debts first. By paying as much as possible on the highest interest credit card you avoid dealing with expensive interest payments. Make sure to also pay at least the minimum monthly payments on the remaining cards. Repeat this process until all of the cards have been paid off. Don’t forget to take into consideration any other form of debt you may have – student loans, a car loan and so on.

At the same time, avoid creating new debt until you manage to get your financial situation under control. For example, if you were planning to get an auto loan, put it off. Focus solely on your needs and don’t indulge in frivolous spending during this process.

Make a plan

Next, take a look at your monthly budget. Subtract rent/mortgage payments and living costs from your income to figure out how much money you will have left to pay off debt. If the sum is too small, think about what you can do to reduce your expenses.


Consider consolidating your debt. A debt consolidation loan is a loan that lets you repay your debts to all your creditors at once. As a result, you will end up with only one monthly payment, often at a lower interest rate than you are paying now. Avoid getting a loan that lowers your payments by extending the repayment period – you will likely end up paying more interest over time.


Contact your creditors to negotiate new arrangements and improve the terms on your debts. Find out if there’s possible to get lower monthly payments, a longer time period to make your payments or a lower rate of interest. Figure out what would be best for you.

Use credit cards responsibly

Avoid costly late fees by making payments on time on every card you have. Make sure every credit card balance is less than 30 percent of your credit limit.

Reducing debt is a usually a lengthy process. It requires a lot of patience and careful planning. Fortunately, by using the advice above, you will be one step closer to reaching your financial goals.


Credit Cards, Debt, Debt Consolidation, Debt Management, Debt Payments, Debts, Financial Difficulties, Financial Plans, Reduce Debt

Meet the author

author avatar Veola Zeller
Veola Zeller is a blogger based in New Mexico. Her many interests include sustainable living, gardening and romance books. Avid Need for Speed player.

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