According to the Federal Reserve, the average American has over $15,000 in credit card debt. While it might seem impossible to get out of debt of that amount, it is possible to pay off $10,000 of it quickly if you have a plan and are willing to make some sacrifices. Here's how to do it.
List your debts from smallest to largest
There are a few different ways to go about paying off your debt. The simplest way is to pay off the debt with the smallest balance first. This will help you get a quick win that will motivate you to continue. You can also try to pay off your debt with the highest interest rate first. This will help you save money on interest, but it may increase your overall payment amount. You can also try to pay off your debt in equal amounts over time. This will help you make progress on all your debts, but it may take longer to pay off the debt.
Consolidate your debt
If you have a lot of credit card, loan, or tax debt, it may be time to look into consolidating. Consolidation means grouping all of your debts into one loan and paying that loan off as quickly as possible. This can help you save money on interest and make it easier to manage your debt.
You can use a balance transfer credit card or personal loan to consolidate tax debt or any other type of outstanding debt you want to knock out. Whichever way you choose to go about it, remember the goal is to get your debts paid off as quickly as possible, so use the method that best fits your unique financial situation.
Make a budget and stick to it
If you want to pay off your credit card debt quickly, you need to make a budget and stick to it. This will ensure you never need to add to your existing debt because you come up short.
Create a budget that shows how much money you plan to spend each month. Then, allocate any remaining funds to paying off your credit card. If you can't afford to allocate money each month to paying off your credit card, make cuts elsewhere in your budget to keep your debt manageable.
Find ways to earn additional income that gets put directly toward your debt
The best way to get out of debt quickly is to find ways to earn additional income that gets put directly toward your debt. This could include finding a part-time job, freelancing, or starting your own business. If none of those are possible, consider selling off things you no longer use and putting the money towards your debt.
Above all, stay disciplined with whatever extra money comes in. Don't let it get diverted into impulse purchases or other expenses. If you genuinely want to pay down credit card debt, you'll need to commit whatever money comes in from your side hustle or selling solely toward your credit cards.
The bottom line
Following a debt reduction plan will help you quickly pay off your credit card debt. It may take sacrifices to stay on track and reach your goal, but it will be worth it.
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Original Source: Credello: How to Pay Off $10,000 of Credit Card Debt Quickly
