There are many experts in the financial world that have different theories about paying off debt. If you have one that works well, please let us know what has worked for you in the comments!
Here are a few options for you to try!
Use an App that Saves Money For You
There are multiple apps that you can use and tie to your bank account that will round each transaction up to the next dollar and then put that remaining amount in a special account. So, if you spent $15.75 on something, it would automatically add $0.25 to the account. While some may use that money to add to their savings, you could take that money and apply it towards debt each month.
Use a Debt Snowball
Dave Ramsey recommends paying off debt by focusing on and attacking the smallest amount first. So if you owe $1,000 to one credit card and then $5,000 of student loan debt, you can pay the minimums, but instead of trying to pay off the larger amount, knock out the smaller amount first. When you’re able to pay off an entire loan, you’ll be encouraged and reinvigorated.
Consolidate and Negotiate Debt
If you have a great deal of debt, talk to a financial professional about how to go about reducing your debt. Sometimes companies buy and sell people’s debt and you might be able to pay just a fraction of your debt. Additionally, sometimes you can get a lower interest rate if you consolidate a bunch of different loans into one loan.
A Word of Caution
Many websites and even professionals will recommend that you do things like borrow against your 401(k), life insurance, etc. They’ll also recommend doing things like filing bankruptcy or get more credit cards. Make sure you understand and are ready to live with the consequences of your actions. Be very careful before doing something drastic.