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The decision to get yourself out of debt can change your wealth and overall outlook on life for the better. When it comes to repaying debt, there are a few tips to keep in mind that will make your payments more manageable and effective.
First things first – you need to prepare yourself mentally for what’s ahead to set yourself up for success.
Getting out of debt involves more than just paying off a few credit cards. It means changing spending habits, learning to how to budget, knowing who and how much you owe, prioritizing debts, and most importantly, staying committed.
Start by looking at exactly how much you owe. After that, write down all of your expenses and income before determining how much money you can set aside each month to pay off debt.
Next, take stock of your credit cards, including the interest rates and minimum payments. If possible, make paying off the debt that has the highest interest rate a priority.
Following the logic above, if you have a $2,000 credit card bill with a 24% interest rate, you should tackle that before your $8,000 student loan with a 7% interest rate.
This strategy minimizes the amount of interest you’re paying overall, which can save you thousands of dollars over time depending on the level of debt you have.
My Credit Monitor acts as your third eye to monitor your credit report. It looks out for predetermined activities and notifies you as soon as the lender uploads your information into your credit file.
This service allows you to receive SMS notifications whenever there is a change to your personal credit report, such as a deteriorating status assigned to any of your credit facilities (eg. From A to B status).
You will also receive an early notification if you have been missing payments and failing to repay your debt. Your repayment status will improve with each repayment you make on time.
Having an accountability partner who checks up on your progress or partnering with someone who’s also working to get out of debt will help motivate you to stick to your debt plan. It could be anyone – a friend, co-worker, spouse, or family member. As an added advantage, you can bounce ideas off each other or provide mutual support when either one of you feels discouraged.
If you truly want to be debt-free, don’t focus too hard on the numbers. Get support and ask yourself what will inspire you to keep going no matter what. Sometimes, motivation and consistency are more than important than the doing the math.