Simple ways to tackle your debt
It happens. For one reason or another, you find yourself buried in debt.
You want to do something but don't know where to start.
So how do you dig yourself out?
One way to whittle down that debit is to break it up into smaller pieces.
"It can be much more manageable, much less intimidating and really help you feel a senses of accomplishment as you start to pay it off," said Kimberly Lankford, contributing editor with Kiplinger's Personal Finance magazine.
I asked her, where's the best place to start?
"On paper, the debt with the highest interest rate is usually the one to tackled first, because once you get rid of that interest you're going to have much more cash flow to help pay down those other debts," she said.
Consider this. Paying off a credit card with an 18-percent interest rate is a lot like earning 18-percent interest on that money.
"That's a lot better guaranteed return than you're getting anywhere else," said Lankford.
In the November issue of Kiplinger's, Lankford suggests a number of ways free yourself from debt.
Some other tips : track every bit of your spending, get help as soon as you see trouble and don't miss any payments.
"If you miss a payment now, you can not only get a late fee but your interest rate will rise and your credit score can suffer," Lankford said.
Lankford also suggests talking to your lenders.
"Let them know about your situation. There may be some simple things they can do that can make a difference," she said. "If you have cash-flow problems, if for example your credit card is due just a few days before your paycheck every month, then ask your lender if maybe they can change your credit card bill until just a little bit after your paycheck. That's something simple for them to do. They don't lose any money. It could make a big difference just in that week for you."
Ever wonder where all your money go each month? Lankford says the only way to find out is to track all of your spending.
"And you don't need to do it all the time, it doesn't have to be totally cumbersome, but just take a week to write down what you're spending money on and you may be really surprised," she said. "The coffee, the lunches, the snacks, the things like that can really add up and you realize that it's making little changes can really make a huge difference when you add up the savings week after week."
It's sort of like a budget in reverse.
More Information:
How to live debt-free
You want to do something but don't know where to start.
So how do you dig yourself out?
One way to whittle down that debit is to break it up into smaller pieces.
"It can be much more manageable, much less intimidating and really help you feel a senses of accomplishment as you start to pay it off," said Kimberly Lankford, contributing editor with Kiplinger's Personal Finance magazine.
I asked her, where's the best place to start?
"On paper, the debt with the highest interest rate is usually the one to tackled first, because once you get rid of that interest you're going to have much more cash flow to help pay down those other debts," she said.
Consider this. Paying off a credit card with an 18-percent interest rate is a lot like earning 18-percent interest on that money.
"That's a lot better guaranteed return than you're getting anywhere else," said Lankford.
In the November issue of Kiplinger's, Lankford suggests a number of ways free yourself from debt.
Some other tips : track every bit of your spending, get help as soon as you see trouble and don't miss any payments.
"If you miss a payment now, you can not only get a late fee but your interest rate will rise and your credit score can suffer," Lankford said.
Lankford also suggests talking to your lenders.
"Let them know about your situation. There may be some simple things they can do that can make a difference," she said. "If you have cash-flow problems, if for example your credit card is due just a few days before your paycheck every month, then ask your lender if maybe they can change your credit card bill until just a little bit after your paycheck. That's something simple for them to do. They don't lose any money. It could make a big difference just in that week for you."
Ever wonder where all your money go each month? Lankford says the only way to find out is to track all of your spending.
"And you don't need to do it all the time, it doesn't have to be totally cumbersome, but just take a week to write down what you're spending money on and you may be really surprised," she said. "The coffee, the lunches, the snacks, the things like that can really add up and you realize that it's making little changes can really make a huge difference when you add up the savings week after week."
It's sort of like a budget in reverse.
More Information:
How to live debt-free