Many people see credit cards as a temporary solution when money is tight, but frequent use or careless spending can quickly create an overwhelming situation. Unhealthy budget planning and purchase habits can cause you to fall deeper into debt. This can feel impossible to overcome, but you can recover by assessing your finances.
Despite having limited funds, you can pay off debt even if you’re struggling to keep up with payments. Learn how you can pay off debt on a budget by following the steps outlined below:
Pay Off High-Interest Debt
Create a list of what you owe and keep the balances with the highest interest rate at the top. Debts at the top of your list will have priority over others and should be the first ones paid off. The key is to pay off high-interest debts first and eliminate expensive debt. In the long-term, you may see an improvement in your credit score due to frequent payments and a better credit utilization ratio. Pick one source of debt that will always receive more than the minimum amount for each pay period.
Establish A Budget
After you have identified your top priority debts, you should establish a budget to help you pay it off each month. Living with your basic needs front of mind can help you cut back on additional purchases. You may also consider cutting costs in other areas to help you make minimum payments on other credit cards at the same time. Scrutinize your spending and identify your essential and non-essential purchases.
Start A Savings Fund
If you can cut down on your spending, you may consider saving the extra income. Putting money aside for an emergency is a stronger safety net than relying on credit cards. Don’t let unexpected emergencies or poor planning derail your efforts to pay off debt once and for all.
Change Your Habits
As you pay off debt, take the time to consider what spending habits led you to hold high debt in the first place. Eliminating or reducing non-essential expenses will make paying off debt much easier. Do you need to buy lunch or can you make it yourself? How many streaming services do you really need? Can you work out at home instead of the gym? Small changes to your behavior and routine can have a significant impact on your budget.
Consider A Debt Consolidation Loan
A debt consolidation loan can make getting out of debt easier, even if your credit score is less than perfect. With a debt consolidation loan, you can pay off multiple credit cards at once and make a single monthly payment. The lower interest rate makes each payment more productive and can help you stay within budget. Unlike credit cards, the interest rates won’t change over time, which eliminates any surprises and makes repayment more manageable.
Cast a wider net and get fast approval for a debt consolidation loan from Lendah. Our expert loan professionals will find the best terms tailored to your unique situation with fast approval and rates starting as low as 3.84% for amounts up to $100,000.
Get started today on our website. Prefer to talk in person? Call us at 833-453-6324 and we’ll get you connected immediately with one of our loan experts.