Let’s get real. There’s no secret to paying off debt. At the end of the day a certain amount must be paid consistently to reduce debt, or it keeps growing. It’s the nature of the beast. Whenever we purchase something on borrowed cash – we must pay it back – usually exponentially. Intimidating, huh?

Let’s shift the way we look at debt. First off, it’s normal. People owe money, it’s part of living. You’re not irresponsible or materialistic if you have debt. You just need a plan. Maybe you’re thinking, “That’s not me, I’m drowning in debt.” There’s hope for you yet.

1. Why am I in debt? It’s a tough question, but think it through. Being honest with yourself will best help you find the right solution. Are you in debt due to spending habits, lack of planning, circumstance, lack of income, etc.?
2. Do I need to change my perspective on spending? If your previous spending patterns have led to debt, try thinking of how you can spend money differently. Are there places you can cut out or spend less? Are there some wants you’ve been considering as needs?
3. Am I organized in my spending? Do you budget? Do you keep receipts? If not, now is the time to start! Track what money you spend and set limits for yourself. It’s especially important to organize your bills by due date and have a separate folder for things you’ve paid off. If you don’t get paper copies – ask for them. Being organized can help you be better prepared.
4. Can I use my tax return to pay off some debt? Tax refunds are a great way to get ahead on payments or relieve yourself of some debt. If you receive a tax refund, and can use some or all of it to reduce debt – do so.
5. What method am I using to pay off debt?  There are some options.
   • You can pay off debt by paying off the highest interest rate loan first to save on the amount of total interest you may pay.
   • You can pay more than the minimum owed by due date, or pay the minimum.
   • You can ask your creditors if they are willing to consolidate your loans or you could choose to consolidate the debts you owe on your own.
   • Don’t pay your debt blindly. A simple call to your creditor may help you reach an agreement to pay less than the amount you owe or cut interest depending on the type of debt or loan.

Prepare For Your Home Purchase!

You can get out of debt. It takes consistent payments and time, but after the first step you’re already on your way. Stop blaming yourself and living with worry. Start today!

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