Household debt rose 15 percent nationwide this year, which means a real burden for those dealing with increased financial insecurity. Fortunately, strategies exist that can help you lower your debt and reduce your debt payments. Consider these three strategies for managing your own debt.
If you owe your creditors a lot of money and you’re behind, it’s time to think about negotiating strategies. In general, use the following:
It may be tempting to make only minimum payments, which are typically two to three percent of your outstanding debt, but this only makes things worse. After all, the longer you take to reduce your debt, the more total interest you pay. Many banks and credit card companies actually like when you pay only the minimum balance since they benefit.
If your monthly payment is $200, for example, try to double it to $400 or more. Find ways to cut back on monthly spending, and you’ll have extra money to make higher payments than the minimum. In the long term, you’ll save money by paying off your debt faster and owing less debt overall.
Ultimately, controlling your debt requires smart budgeting, financial sacrifices and limiting your spending. However, if your debt is out of control, one or more of these strategies can help.
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