One by One Method

Let’s talk about debt. It’s a term that most people dread, probably because many of us have accumulated some type of debt throughout the years. In fact, CBS news reports that U.S. consumers have approximately 3.4 trillion dollars in outstanding debt. Why? Well, it’s probably because our paychecks are remaining the same, while our expenses continue to increase. Life keeps getting more and more expensive, so how do we get out of debt? The following tips have helped me lower my debt tremendously.First, take some time to list all of your monthly loan and credit card payments. Once you have those listed, circle your lowest monthly payment. This is the one you should attack first. Since this is your lowest monthly payment, it will be the easiest to apply extra to each month. A small amount such as forty dollars extra could help you pay off that loan quicker.

Once you have the first loan paid off, you will feel better and start to see the benefits of this method. Now you can apply the payment you were putting to the previous loan to the next loan you would like to pay off. I like to call this the one-by-one method, because eventually each of your loans will get paid off one by one! It may not happen as quickly as you would like it, but you will start to notice that you are slowly paying off your debt.

In order to make this method work, keep your goal in mind. Be conscious of your spending habits and realize that what you spend could be applied to the debt you are trying to pay off. Do not spend what you do not have. In other words, put those credit cards away! Cut them up! Hide them! Remember your goal is to eliminate debt, not to accumulate more.