The Ultimate Guide To The Debt Avalanche Method For Paying Off Debt

The Ultimate Guide To The Debt Avalanche Method For Paying Off Debt

2020

BUDGET BOSS 

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2020

BUDGET BOSS 

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Paying off debt is haaarrrdd work.

Between high-interest rates and an inability to afford more than the minimum payment, becoming debt-free can feel like an impossible task.

But, there is good news:

These are the five best budgeting methods.  I bet you're ready to afford your dream life. I know I was! That is when I transformed my finances, starting with my budget. These are the 5 best budgeting methods to help you afford your dream life. If you want to stop living paycheck to paycheck, pay down debt, or save more money, one of these budgeting methods will help you. Being responsible with your money means creating a plan. These budgeting methods are the best to do that. Click to discover which budget method works best for you.
Some of the links in this post are “affiliate links.”  This means if you click on the link and purchase the item, WSW will receive an affiliate commission.  Additionally, Who Says What is a member of the Amazon Affiliate Program.  Please review our Privacy Policy for more information.
When you use a debt payoff strategy, like the Debt Avalanche Method, becoming debt-free will become your reality.

Today, we’ll go over:

  • what the debt avalanche method is,
  • the pros and cons of using this method, 
  • how to set up your own debt avalanche, 

and more.

Let’s dive in so you can become a debt-free badass ASAP.

WHAT IS THE DEBT AVALANCHE METHOD?

The Debt Avalanche Method is a strategy for paying off debt that has you prioritize your debt payoff in order from highest interest rate to lowest.

 In other words:

When you use the avalanche method, you will make minimum payments on all your debts EXCEPT for the one with the highest interest rate.

Next, you will put as much extra money as you can afford towards paying off your highest-interest debt until it is paid off.

Finally, you’ll repeat this process until you are debt-free.

THE PROS & CONS

One of the reasons why paying off debt is so difficult is because of high-interest rates.

Because of interest rates, each month when you make a payment, part (or in some cases almost all) of your payment will go directly to the loan company and only a small amount will go towards lowering your overall debt.

But, when you use the debt avalanche method, you will save tons of money on interest in the long run by eliminating your high-interest rate debts first.

This is the biggest pro to using the debt avalanche method: You won’t waste tons of money paying off interest.

Now, you might be wondering:

“This sounds like the best answer for paying off debt, how can there be any cons?”

Well, while you will save a ton of money, usually your highest interest rated debt is your largest, thus, it might take you a long time to pay off this debt.

Because of this, using the debt avalanche method can result in low satisfaction when you do not see huge progress after making many payments.  And with this, comes a lack of motivation.

However, with that being said, I still believe the debt avalanche method is the best strategy for paying off your debt if you want to save money in the long run.

HOW TO SET UP YOUR DEBT AVALANCHE

Setting up your debt avalanche plan is super simple.

Just follow these steps:

  1. List your debts in order from highest interest rate to lowest
  2. Make your minimum payments on all debt + put all extra money towards the highest interest rated debt until it is paid off
  3. Put your first debts minimum payment towards next debt + extra money
  4. Repeat this process until all debt is paid off

Let’s go over each step in more detail, now:

STEP 1:  List your debts in order from highest interest rate to lowest
Before diving into your journey to becoming debt-free, it is crucial that you know exactly how much debt you have.

So, make a list of every debt you have including how much you owe, your interest rate, and your minimum monthly payment.

Then, number this list in order from your highest interest rate to your lowest interest rate.

(Make sure you’re not forgetting any debts by using a copy of your credit report from Credit Karma!)

For example:

  • Debt 1 – Credit Card #1: 27.5% interest rate, $8,000 balance, $145 minimum payment
  • Debt 2 – Credit Card #2: 19% interest rate, $3,000 balance, $70 minimum payment
  • Debt 3 – Car Loan: 6% interest rate, $8,500 balance, $390 minimum payment
  • Debt 4 – Studen Loan: 5.8% interest rate, $11,000 balance, $100 minimum payment

**To help you with this step, I’ve created a super simple worksheet that you can download as part of your Budget Boss Binder.

*Included in our Budget Boss Binder
STEP 2:  Make minimum payments on all debts + put all extra money towards debt #1
This is when you’ll start paying off your debt by making minimum payments on all your debts EXCEPT your number one priority debt.

On your debt with the highest interest rate, make your minimum payment + put all your extra money towards additional payments.

I know, I know.  Extra money.  Ha!

The reality is that most of us don’t have extra money laying around (or we probably wouldn’t be in debt).

But, the good news is:

Finding extra money for your debt repayment is simple.

Firstly, go over your current budget (or make a budget if you don’t have one) to ensure you’re not carelessly spending money.

Secondly, free up extra money for your debt payments by lowering your monthly expenses.

You can:

1.  Refinance your mortgage for a lower interest rate & start paying biweekly

2.  Sign up for Trim to cut your cable, phone, and WiFi bills in half

3.  Switch to Mint Mobile to save hundreds on your cell phone bill

4.  Refinance your car loan for a lower interest rate

5.  Shop around for lower car insurance

6.  Invest in energy-efficient options to reduce utility costs

7.  Consolidate your credit card debt into a personal loan to decrease your interest costs and create one low monthly payment

8. Refinance your student loans for a lower interest rate

9.  Switch to Chime Bank (it’s SO simple!) to get rid of all banking fees (and get a FREE $50 gift right now)

And, lastly, you can always make more money to put towards your debt by asking for a raise, working overtime, getting a second job, starting a blog or side hustle, selling your stuff, renting out a spare bedroom in your home, and more.

Here is what step #2 should look like:

  • Debt 1 – Credit Card #1: 27.5% interest rate, $8,000 balance, $145 minimum payment – MAKE $145 MINIMUM PAYMENT + ALL EXTRA MONEY YOU HAVE
  • Debt 2 – Credit Card #2: 19% interest rate, $3,000 balance, $70 minimum payment – MAKE $70 MINIMUM PAYMENT
  • Debt 3 – Car Loan: 6% interest rate, $8,500 balance, $390 minimum payment MAKE $390 MINIMUM PAYMENT
  • Debt 4 – Studen Loan: 5.8% interest rate, $11,000 balance, $100 minimum payment – MAKE $100 MINIMUM PAYMENT

You will continue step #2 each month until your debt 1 is paid off in full.

STEP 3:  Put debt 1’s minimum payment + extra money to debt 2
Once your first debt is paid off (yay!), you can put its minimum payment + all extra money towards your next debt.

This means that your second debt shouldn’t take as long to pay off because you’ve significantly increased the amount of money you have to put towards payments.

For example:

  • Debt 1 – Credit Card #1: 27.5% interest rate, $8,000 balance, $145 minimum payment – MAKE $145 MINIMUM PAYMENT + ALL EXTRA MONEY YOU HAVE –  PAID OFF
  • Debt 2 – Credit Card #2: 19% interest rate, $3,000 balance, $70 minimum payment – MAKE $70 MINIMUM PAYMENT + $145 MINIMUM PAYMENT (FROM DEBT 1) + ALL EXTRA MONEY
  • Debt 3 – Car Loan: 6% interest rate, $8,500 balance, $390 minimum payment – MAKE $390 MINIMUM PAYMENT
  • Debt 4 – Studen Loan: 5.8% interest rate, $11,000 balance, $100 minimum payment – MAKE $100 MINIMUM PAYMENT

Once debt 2 is paid off, put debt’s 1 and 2’s minimum payments towards debt 3, and so on.

STEP 4:  Repeat this process until you are debt free!
Once you’ve gotten the hang of the debt avalanche and have paid off your first two debts, you’ll simply continue the same process until you are debt-free.

By the time you’re working to pay off your 3rd, 4th, 5th, debt you’ll have so much money to put towards payments that clearing your debt will become a breeze.

Cheers to becoming debt-free!

HOW TO MAKE SURE YOU  STICK TO YOUR DEBT PAYOFF PLAN

Now, sticking to your debt payoff plan is easier said than done.

So, how do you make sure you follow through each month on your debt avalanche?

I’ve got two ways to motivate you to continue paying off your debt:

  1. Create a reward system
  2. Track your progress

Firstly, after you pay off each debt (or half of each debt), reward yourself!  Go out on a celebratory date, buy a new outfit, pop some champagne, etc.

After paying off large sums of debt, you should acknowledge and feel goooooood about such a big accomplishment.

Secondly, and most importantly, you should track your debt repayment progress each month to make sure you’re sticking to the plan.

To track your debt repayment progress, I highly recommend using our Budget Boss Binder.

When you use our Budget Boss Binder to track your debt repayment progress, you will be able to map out your budget each month to make sure you’re putting as much money as possible towards paying off debt.  You’ll also be able to track your debt payments using a monthly tracker.

And, I’m excited to tell you:

Because we love our readers so much (where would we be without you!?), we’re offering our Budget Boss Binder for only $9 (66% off) RIGHT NOW.

SPECIAL OFFER!

SAVE $18 RIGHT NOW

When you act fast, you can download our best-selling Budget Boss Binder for only $9!  But, quick!  This deal ends tonight at midnight!

Alright!  There you have it!

A complete guide to the debt avalanche method for paying off debt!

Will you be using this strategy to become debt-free?  Or do you have a better way?  Leave a comment below!

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DESTROY YOUR DEBT!
– michelle
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2020BUDGET BOSS planner2020BUDGET BOSS plannerGetting out of debt can feel like an impossible task. That is until you use one of the best methods for paying off debt quickly. When I used one of these four methods to pay off my...

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4 Methods To Get Out Of Debt Fast

4 Methods To Get Out Of Debt Fast

2020

BUDGET BOSS 

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2020

BUDGET BOSS 

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Getting out of debt can feel like an impossible task.

That is until you use one of the best methods for paying off debt quickly.

When I used one of these four methods to pay off my debt, I saved $3,000 and became debt-free in just 6 months.

Keep reading to learn how you can do the same!

get out of debt
Some of the links in this post are “affiliate links.”  This means if you click on the link and purchase the item, WSW will receive an affiliate commission.  Additionally, Who Says What is a member of the Amazon Affiliate Program.  Please review our Privacy Policy for more information.

If you want to pay off your debt quickly while saving tons of money, you must make a plan.

For instance, how much debt do you owe and what is the best method for paying off your debt?

These are the four best methods to get out of debt fast:

  1. Debt Avalanche Method
  2. Debt Snowball Method
  3. Debt Consolidation
  4. Balance Transfer

Explore each option to find the best fit for you!

Let’s dive in.

1.  The Debt Avalanche Method

If you want to save a ton of money in the long run, you should absolutely consider using the debt avalanche method to get out of debt fast.

The avalanche method will save you thousands of dollars in interest costs by applying the majority of your repayment efforts towards your debt with the highest interest rate.

Here’s how it works:

  1. Make a list of your debts from biggest to smallest depending on interest rates
  2. Make your minimum monthly payments on all your debts EXCEPT the debt with the highest interest rate
  3. Put as much money as you can afford towards debt payments on your debt with the highest interest rate until it is paid off
  4. Repeat this process until all debt is paid off

 

The biggest pro to the debt avalanche method is that you will save a lot of money in the long run.

The con is that your highest interest rated debt is often your largest, and thus may take some time to pay off; resulting in low satisfaction and motivation.

If you’re a fan of more instant gratification, the debt snowball method might be a better option for your debt payoff.

2.  The Debt Snowball Method

The debt snowball method is very similar to the debt avalanche method except for one detail:

When you use the snowball method, you’ll pay off your debts in order from the least amount owed to the most amount owed.

For instance:

  1. You’ll make a list of your debts in order from the smallest total due to the largest total due
  2. Continue to make your minimum monthly payments on all your debts EXCEPT your smallest debt
  3. Put as much money as you can afford towards paying off your smallest debt
  4. Repeat this process until you are debt-free

By knocking out your smallest debts first, it will feel like paying off your debt is simple because you’ll be able to pay off each debt quickly.

However, the debt snowball method will not save you money in the long run.

3.  Debt Consolidation

One of the biggest setbacks to getting out of debt is the high-interest rates attached to most loans.

For instance, the average interest rate on credit cards is a whopping 17.5%!

And, it gets worse:

If you can only afford your minimum monthly payments, you’ll be paying off your debt for years without feeling like you ever make any progress.

Not fun.

That’s why debt consolidation can change your life and make getting out of debt a breeze.

When you consolidate your debt into one lump sum, you’ll drastically decrease your overall interest rate and will only have to worry about one debt payment.

As I said, debt consolidation is the perfect way to get out of debt fast if you have large amounts of debt and can only afford your minimum monthly payments.

To become debt-free using debt consolidation, follow these simple steps:

  1. Apply for a low-interest personal loan in the amount of your total debt
  2. Once your loan is approved and funded, pay off all your debt
  3. Pay your personal loan each month (making larger payments than your minimum due will help you become debt-free even quicker)

I used a personal loan to consolidate my credit card debt and saved over $3,000 and was able to pay back my debt in half the amount of time than if I continued making minimum payments!

4.  Balance Transfers

Using a balance transfer to get out of debt is helpful for credit cards that have high-interest rates.

For example:

Let’s say you owe $5,000 on a credit card with a 22% interest rate.

When you apply for a balance transfer credit card with an introductory APR of 0% for the first 12 months, you can transfer your $5,000 debt to your new card to pay it off without paying interest.

This is a great solution if you can find a balance transfer credit card with a zero or low-interest rate but obviously doesn’t help otherwise.

And, referring to my example above, you will only benefit from paying off debt with a balance transfer IF you pay off the balance on your new credit card within the 12-month time-frame.  Otherwise, you’ll be hit with an interest charge for the remaining balance.

To use a balance transfer credit card to get out of debt, follow these simple steps:

  1. Research balance transfer credit cards and ONLY apply to ones with a 0% introductory APR
  2. Once approved, transfer your debt from your old credit card to your balance transfer credit card
  3. Aggressively pay off your balance transfer credit card before the introductory APR expires

You can find tons of great balance transfer options on CreditKarma!

Alright!  There you have it!

The four best methods to get out of debt fast.

Which debt payoff method are you going to use to destroy your debt?  Leave a comment below!

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DESTROY YOUR DEBT!
– michelle
P.S.  Was this post helpful?  Consider buying us a coffee to show your love <3
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MORE GOOD READS…

Planning For Your Financial Future

When you are young, life seems to last forever and every bit of money that finds its way into your pocket is for spending. Money quite often flows through our lives without stopping for much of our youths.  But we live in times of such big financial changes, it...

read more

4 Methods To Get Out Of Debt Fast

2020BUDGET BOSS planner2020BUDGET BOSS plannerGetting out of debt can feel like an impossible task. That is until you use one of the best methods for paying off debt quickly. When I used one of these four methods to pay off my...

read more
Master Your Money Super Bundle 2019
What's inside the Master Your Money Super Bundle

TOTAL VALUE: $1206.41

ACTUAL PRICE: ONLY $49!

Free Budget Boss eCourse!

Never wanna stress about money again?  Sign up now for your 5-day budget eCourse that will transform your finances.  (With Printables)

Copyright © 2016-2019 WHO SAYS WHAT • WEBSITE DESIGN BY DIVI • POWERED BY TMDHOSTING

5 Magical Tips To Have A Joyful & Debt Free Christmas

5 Magical Tips To Have A Joyful & Debt Free Christmas

2019
CHRISTMAS
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2019
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In the age of social media, the pressure to have the best, most magical Christmas ever is hella high.

Between gifts, parties, and matching PJs, it can feel like you have to spend a ton of money to get into the holiday spirit.

This is crazy, but:

These are the five best budgeting methods.  I bet you're ready to afford your dream life. I know I was! That is when I transformed my finances, starting with my budget. These are the 5 best budgeting methods to help you afford your dream life. If you want to stop living paycheck to paycheck, pay down debt, or save more money, one of these budgeting methods will help you. Being responsible with your money means creating a plan. These budgeting methods are the best to do that. Click to discover which budget method works best for you.
Some of the links in this post are “affiliate links.”  This means if you click on the link and purchase the item, WSW will receive an affiliate commission.  Additionally, Who Says What is a member of the Amazon Affiliate Program.  Please review our Privacy Policy for more information.
You can have a magical Christmas without going into debt!

These are my tips:

1.  Create A Christmas Budget

Before you buy gifts or make invitations to your highly anticipated Christmas party, you must make a Christmas budget.

Firstly, go over your current budget and figure out how much money you can realistically spend on Christmas.

Then, simply divvy up the amount of money you can spend during the holidays!

For instance, your Christmas budget might look like this:

  • Gifts – $100
  • Stocking Stuffers – $50
  • Gift Wrap, etc. – $15
  • Party/Parties – $100

To organize your finances and create a realistic Christmas budget, download our Budget Boss Binder and track your spending so you don’t overspend on gifts or cookies!

2.  Start Saving Now

Did you take a look at your budget and find that you can’t afford Christmas gifts and activities without using a credit card?

Don’t worry:  You can still have a debt-free Christmas (with a little work)!

Firstly, take the time to decrease your current monthly expenses to free up some extra cash.

You should:

1.  Sign up for Trim to cut your cable, phone, and WiFi bills in half

2.  Refinance your mortgage, car loan(s), and/or student loans for a lower interest rate

3.  Consolidate your current debt into a personal loan to decrease your interest costs and create one low monthly payment

4.  Switch to Chime Bank (it’s SO simple!) to get rid of all banking fees (and get a FREE $50 gift right now)

Then, once you’ve decreased your monthly expenses you can start putting that saved money aside for the holidays!

You can create and track your savings goals with these printables! (included in our Budget Boss Binder)

SPECIAL OFFER!

SAVE $18 RIGHT NOW

When you act fast, you can download our best-selling Budget Boss Binder for only $9!  But, quick!  This deal ends tonight at midnight!

3.  Continue Paying Off Current Debts

If you’re currently in debt (don’t worry, most of us are!), it can feel one of two ways during the holidays:

  1. “I can’t afford anything because I’m already buried in debt!”
  2. “I might as well go crazy, since, well, I’m already buried in debt!”

However, in order to have a debt-free Christmas, you can’t lose track of your debt payoff progress during the holidays!

Use the rest of the tips in this most to keep costs low this holiday season so you can continue to make progress on your debt payoff.

You must:

  • Continue to put as much money as possible towards your debt payoff
  • NOT charge anything else to a credit card

Resist the urge to go spending crazy just because the holidays feel like an excuse to do so (they’re not!).

(Track your debt payoff so you can reward yourself later!)

4.  Don’t Go Overboard

I know, I know.  I must be crazy!

Aren’t the holidays the only time to spoil my kids rotten?!

Here’s the dealio:  Don’t let Instagram pressure you into putting 100+ presents under your tree this year.

Because you and I both know that kids don’t need a ton of stuff to be happy and feel loved.

Instead of buying your kids love this year (I’m kidding! Kind of), use the “Want, Need, Wear, Read” method of Christmas shopping.

It goes like this:

Buy your kiddos four gifts each:  Something they want, something they need, something to wear, and something to read.

This is the PERFECT way to keep your Christmas budget low without feeling like you’re skimping out on gift-giving.

We’ve been doing this for a few years now and love how much meaning it’s brought back to the holidays.

And, this tip doesn’t only apply to shopping for your kids.

This holiday season, don’t go for the WOW factor.

Go for the AWE factor by putting more thought into one gift instead of a lot of money into many gifts.

Thought over cost, my friends!

5.  Collect Cash Back On Christmas Purchases

When making purchases this holiday season, make sure you earn cash-back whenever possible!

You should sign up for:

  1. Rakuten ($10 Sign-Up Bonus),
  2. Ibotta ($10 Sign-Up Bonus), and
  3. Dosh ($5 Sign-Up Bonus).

Each of these cash-back programs will help you earn money on every qualifying purchase throughout your holiday shopping.

With the money you earn, buy yourself a Christmas gift or pay it forward to your current debt payoff strategy!

What you should do if you must use credit cards for the holidays

These are all great tips to help you have a magical, affordable, and debt-free Christmas.

But, what if you can’t avoid using credit cards this holiday season?

If you find yourself in a pickle and need to use borrowed money, these are my best tips:

  • Open a new credit card with an introductory 0% APR – Avoid getting hit with high-interest costs by paying off your Christmas spending balance ASAP.
  • Take out a personal loan instead – Personal loans often have far lower interest rates than credit cards and could be a good option if you can’t get approved for a low-interest credit card
  • Sit this one out – You should NEVER feel pressured to put yourself into debt in order to afford gifts, parties, etc.  Sit Christmas out this year – or at least the expensive parts of Christmas – so you don’t accrue more debt.

When you use these tips, you’re sure to have a magical and debt-free Christmas this year!

And, don’t ever forget:  The holiday season is about love, family, friends, community, and traditions – not about gifts.

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happy holidays!
– michelle
P.S.  Was this post helpful?  Consider buying us a coffee to show your love <3
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MORE GOOD READS…

4 Methods To Get Out Of Debt Fast

2020BUDGET BOSS planner2020BUDGET BOSS plannerGetting out of debt can feel like an impossible task. That is until you use one of the best methods for paying off debt quickly. When I used one of these four methods to pay off my...

read more
Master Your Money Super Bundle 2019
What's inside the Master Your Money Super Bundle

TOTAL VALUE: $1206.41

ACTUAL PRICE: ONLY $49!

Free Budget Boss eCourse!

Never wanna stress about money again?  Sign up now for your 5-day budget eCourse that will transform your finances.  (With Printables)

Copyright © 2016-2019 WHO SAYS WHAT • WEBSITE DESIGN BY DIVI • POWERED BY TMDHOSTING

5 Things You MUST Do If You Want To Pay Off Debt Quickly

5 Things You MUST Do If You Want To Pay Off Debt Quickly

2020

BUDGET BOSS 

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2020

BUDGET BOSS 

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Living with debt is a reality that most people are dealing with.

With high-interest rates and an overwhelming pressure to indulge in the latest trends, paying off debt quickly can seem impossible.

Here’s the good news, though:

These are the five best budgeting methods.  I bet you're ready to afford your dream life. I know I was! That is when I transformed my finances, starting with my budget. These are the 5 best budgeting methods to help you afford your dream life. If you want to stop living paycheck to paycheck, pay down debt, or save more money, one of these budgeting methods will help you. Being responsible with your money means creating a plan. These budgeting methods are the best to do that. Click to discover which budget method works best for you.
Some of the links in this post are “affiliate links.”  This means if you click on the link and purchase the item, WSW will receive an affiliate commission.  Additionally, Who Says What is a member of the Amazon Affiliate Program.  Please review our Privacy Policy for more information.
When you do these five things before paying off your debt, you’ll be able to pay off debt quickly, easily, and affordably.

So, here’s what you need to do before you start your debt repayment journey:

  1. Create A Budget
  2. Decrease Your Expenses
  3. Make More Money
  4. Negotiate Lower APRs
  5. Make A Debt Pay Off Plan

After using these tips, I was able to save $3,000 and pay off my debt in half the amount of time I originally thought it would take!

Let’s do this:

1.  Create A Budget

Before you start paying off debt, you want to create a budget (or evaluate your current one).

This way, you can get a clear picture of how much money you make, spend, and have leftover each month.

To create a strong budget, follow this guide!

Then:

Decide how much money you’re going to put towards paying off debt each month.

2.  Decrease Your Monthly Expenses

To pay off debt quickly, you should be putting as much money as possible towards debt payments each month.

If you’re currently living paycheck to paycheck and can only pay the minimum amount due on your credit cards, student loans, etc., it can feel like it’ll take you years to become debt-free.

And here’s the deal:

It will take you years to pay off your debt if you don’t free up extra money to make aggressive debt payments.

Here’s the good part, though:  Decreasing your monthly expenses is easy.

First, make a list of all your expenses.

Next:

Make a plan to decrease each item on your list (to the best of your ability)!

For example, you should:

1.  Refinance your mortgage for a lower interest rate & start paying biweekly

2.  Sign up for Trim to cut your cable, phone, and WiFi bills in half

3.  Switch to Mint Mobile to save hundreds on your cell phone bill

4.  Refinance your car loan for a lower interest rate

5.  Shop around for lower car insurance

6.  Invest in energy-efficient options to reduce utility costs

7.  Consolidate your credit card debt into a personal loan to decrease your interest costs and create one low monthly payment

8. Refinance your student loans for a lower interest rate

9.  Switch to Chime Bank (it’s SO simple!) to get rid of all banking fees (and get a FREE $50 gift right now)

Then, once you’ve decreased your monthly expenses you can start putting that saved money towards additional debt payments!

You can create and track your savings goals with these printables! (included in our Budget Boss Binder)

SPECIAL OFFER!

SAVE $18 RIGHT NOW

When you act fast, you can download our best-selling Budget Boss Binder for only $9!  But, quick!  This deal ends tonight at midnight!

3.  Make More Money

As I said, paying off debt quickly is a million times easier when you have a lot of extra money to throw towards debt payments.

Easier said than done, though, right?

In our last tip, we encouraged you to decrease your monthly expenses by as much as possible to free up money.

If you weren’t able to decrease your expenses by as much as you thought, don’t worry:

There is always money to be made!

To make more money to put towards paying off your debt, consider:

  1. Asking for a raise
  2. Working overtime
  3. Getting a second job
  4. Freelancing
  5. Starting a blog
  6. Managing a side hustle
  7. Sell your stuff
  8. Take surveys

There are tons of ways to make more money each month and it will make a HUGE difference in how long it will take you to pay off your debt.

4.  Negotiate Lower APRs

Do you know the hardest part about paying down debt?

Dealing with insanely high-interest rates that make it impossible to make progress on your debt repayment is the number one reason people feel hopeless when it comes to paying off debt.

So, before you start paying off your debt, you should negotiate lower APRs for all of your debt.

When you use Trim, they will negotiate lower interest rates FOR YOU, with just a single click of a button.

And, there’s more good news:

If you can’t negotiate a lower APR for some reason, you can always consolidate your debt into a personal loan or refinance your loan for a lower interest rate.

When you consolidate your debt into a personal loan, you’ll have a lower overall interest rate and will only have to worry about a single payment.

I recently consolidated my credit card debt and saved $3,000 in interest costs!

Lowering your current APR’s, consolidating with a personal loan, or refinancing for a lower interest rate will save you so much friggen money in the long run, so don’t skip this step if you want to pay off debt quickly!

5.  Make A Debt Payoff Plan

The last thing you must do before you start paying off debt is to MAKE A PLAN!

You do not want to go into your debt payoff journey blind, because if you do, you will waste time and money.

To make a debt payoff plan, do these 2 things:

  1. Make a list of all debts
  2. Decide the best plan of action for each debt

I’ll go more into detail, now:

1.  WRITE DOWN YOUR DEBTS

Make a detailed list of all of your debts, including this information for each:

  1. Name of debt 
  2. Total amount owed
  3. Minimum monthly payment
  4. APR

*Leave some room beneath each debt to write down your plan of action.

*Debt Repayment Worksheet included in our Budget Boss Binder

2.  DECIDE YOUR PLAN OF ACTION

Once you’ve listed out all your debts, you can tackle each one individually.

Underneath each debt on your list, write down your action steps for paying it off.

For instance, will you:

  1. Use the debt snowball technique?
  2. Use the debt avalanche technique?
  3. Consolidate with a personal loan?
  4. Use a balance transfer credit card?

Having a clear plan for your debt will help you pay it off quickly, easily, and without stress!

*Bonus!  How To Make sure you stick to your debt payoff plan:

So, it’s all fine and dandy to make a debt payoff plan, but:

How are you going to make sure you stick to your debt payoff plan instead of spending your extra cash on Target runs?

Two ways:

  1. Using a reward system
  2. Tracking your progress

Firstly, promise yourself a reward after each debt is paid off – this will give you motivation and incentive to keep going.

Secondly – and most importantly – you should track your debt repayment progress to make sure you’re sticking to your goals.

When you use our Budget Boss Binder, you can easily create your debt repayment goals and then track them each month with our debt repayment tracker!

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DESTROY YOUR DEBT!
– michelle
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7 Reasons To Say ‘No’ to Credit Cards

7 Reasons To Say ‘No’ to Credit Cards

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Out of cash? Use a credit card.

Stuck in an emergency? Use a credit card.

Credit cards are perhaps the most eligible competitors for the position of ‘man’s best friends’ after dogs!

Seriously, a credit card is known to be a tool that helps one sail through hardships and emergencies smoothly.

But, what is yet to be pondered upon is whether this reason is enough for us to adopt and use a credit card extensively?

I know there are numerous other benefits of credit cards as well.

For instance:

Credit cards come up with offers and lucrative deals on hotel and flight bookings, provide incentives such as significant cashback and also provide you with credit interest-free for a fixed period of time without any collateral.

Wonderful, I must say!

Also, credit cards lend you the ability to build your credit score.

But have you, at any point in time, considered that if a single credit card has the ability to build your credit score, it also has the ability to destroy it forever?

Apart from this, do you know crores of people around the globe succumb to debt traps because of credit cards every year?

Don’t believe me? Read about an incident that happened in Delhi, India a week ago: Unable To Pay Credit Card Bills, Man Jumps To His Death.

Why?

Because credit cards follow a basic principle: Spend now and pay later.

This policy of credit cards makes people spend more than what they can really afford. But why would people do that?

To maintain their ‘social status’ in society.

Now, another thing most people wonder is that what is the problem in spending now and paying later?

Well, there is nothing really ‘wrong’ in it, well not until you make it a habit.

People usually tend to get stuck in this debt trap when they start spending more than what they can possibly pay later. It takes years and years, even decades, to repay credit card dues.

People often tend to pay the minimum required amount and then take on more and more debt.

I hope I have convinced you enough to not use credit cards!

But for a more detailed approach, let’s explore 7 reasons to say no to credit cards in detail:

1.  Credit Card Interest Rates Are Surprisingly High

Credit cards usually have surprisingly high-interest rates which start to accrue after a certain grace period.

Most people are not aware of these interest rates and hence continue borrowing without a pay-back plan.

In fact, interest rates also grow with time and can rise to such a high level that your interest becomes higher than your initial loan amount.

The best way to avoid this kind of situation is to avoid buying exorbitant things which you can’t otherwise afford with cash.

2. Credit Cards Lead To Overspending

Credit cards have been designed very smartly.

Their concept is designed in a way that makes people overspend than their budgets.

This will lead to people paying interest rates and ultimately the credit card companies’ profits!

But why do people overspend?

Well, purchasing an item simply doesn’t appear as huge a deal if you simply need to swipe a plastic card and don’t have to worry about its payment for a month at least.

However, if you pay with actual money, you can physically feel the paper money leaving your hand.

This makes you more mindful of your expenses.

3. You May Get Stuck In A Debt-Trap

If you go on a spending spree with your credit card without a proper pay-back plan in place, you may be digging your own grave.

Debt trap is the worst thing that can happen to anyone financially. It eats you away physically, mentally and financially.

I know what you must be thinking: “this won’t happen to me!”

Well, you are wrong my dear friend.

Anyone, I repeat, anyone can get into a debt trap if he/she is an avid user of credit cards.

4. Concealed Terms & Conditions

Have you ever considered reading the terms and conditions when signing up for a credit card?

No?

I must tell you that you should.

I know the terms and conditions are written in a very small type but trust me, they are worth reading.

When you will actually read these terms and conditions, you will literally be shocked by the number of things that were being kept in the dark from you by the company.

This little fine print will uncover some unknown facts and policies related to your dear credit card.

5. Credit Cards Can Ruin Your Credit Score

If you fail to repay your credit card dues continuously, your credit score will start to diminish.

And, as I am sure you would know, having a good credit score is extremely important.

If your credit score goes down, you’ll notice your insurance premium will go up.

This is because some insurance companies check credit scores while calculating each individual’s premium, and when they’ll see that you have failed to pay the dues of your credit card, they’ll charge higher from you since you’re an irresponsible person in their eyes.

Also, that’s not it.

A poor credit score is like a seed for a tree of financial problems.

Some companies check the credit scores of applicants before hiring them for a job. If and when you apply for a home loan, there are chances that you are required to pay high interest, or worse, you’ll be denied the loan citing your low credit score.

6. Risk Of Ruining Relationships

Using a credit card can really ruin relationships!

Couples tend to fight over many topics, but the money topic tops that list.

What if your partner is a spendthrift and therefore often ends up overspending, whereas you are a saver?

To avoid silly fights (that can soon turn into serious arguments), it is better to set up a budget and spending plan and avoid disturbances like a credit card.

7. Credit Cards Rob You Of Mental Peace

Answer me honestly: are you at peace when you know that you owe your friend money for that movie night?

No, right?

Well, think of the mental peace which comes when you don’t have to worry about any interest rates, penalties, dues, credit card bills etc.

One word: Priceless!

Trust me; this mental peace will give you much greater satisfaction than whatever product you purchase through borrowing money.

Therefore, instead of borrowing through a credit card and losing sleep over it, make a wish list of your favorite items and buy them when you can really afford them.

It will be worth the wait!

In Conclusion…

In conclusion, while credit cards may prove to be your best friends in times of an emergency, they can very similarly turn into your worst enemies if used recklessly.

Therefore, you must say no to credit and use a card only when it is absolutely necessary.

Start saving each month and you’ll soon discover that you have enough funds for buying that ‘wish list item’ of yours!

Also, this way you won’t have to worry about debt when you retire.

The comfort and advantages offered by credit cards make them seem amazing but think about their downside as well before using.

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CIAO!

– DISHIKA <3

Dishika is a personal finance blogger at Bachat. With her articles, she breaks down complex financial concepts into bite-sized articles that are fun to read and easy to understand. Bachat is a one-of-its-kind mobile app that helps you save money on autopilot.

P.S.  Was this post helpful?  Consider buying us a coffee to show your love <3

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How To Quickly Pay Off Credit Card Debt When You Have No Money

How To Quickly Pay Off Credit Card Debt When You Have No Money

2020

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Did ya know that 80% of Americans are in debt?  With a lot of that debt being primarily from credit cards.

That’s 260 MILLION people.  260,000,000. #shockedemoji

Are you one of them?  I know I am was.

Here’s the deal, though:

pay off credit card debt, debt, debt free, debt consolidation, personal loan, budgeting, budgeting for beginners, how to budget, free printables, budgeting printables, budget binder, financial planner

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Credit card debt is hella hard to pay off due to high-interest rates, especially if you don’t have a ton of extra money lying around to pay more than your monthly minimums.

With this, you might be wondering:

“How on earth are you supposed to pay off credit card debt with you don’t have two dimes to rub together?”

I paid off $6,000 in credit card debt (don’t judge me) while saving over $3,000 in the process and cutting my pay-back time in half – and you can too.

So, how’d I pay off my credit card debt quickly, cost-effectively, and raise my credit score by over 55 points?

I consolidated my credit card debt!

Credit card debt payoff with debt consolidation is awesome for 3 reasons:

1.  Personal loans have far lower interest rates than most credit cards (a.k.a, you’ll save a shit ton of money in interest costs).

2.  Personal loans allow you to pay off your debt in half of the amount of time than if you continued making regular, minimum payments on your credit cards.

3.  Consolidation of your credit card debt into a personal loan will drastically increase your credit score.

Let’s dive into what credit card debt consolidation is, the pros and cons, if it’s right for you, and how to get started!

>> WHAT IS CREDIT CARD DEBT CONSOLIDATION?

Credit card debt consolidation is when you combine all of your credit card debt into one payment using a balance transfer to a lower APR credit card or through a personal loan.

In other words, you’re going to lump all of your credit card debt into one nice, low, convenient payment.

As I mentioned, you can do this two ways:

  1. With a balance transfer credit card
  2. Using a personal loan

Ideally, you’ll be transferring your debt to a lower APR option to lower your monthly payment and pay-back time.

Let’s go over the pros and cons consolidating your credit card debt, now:

>> PROS OF CREDIT CARD DEBT CONSOLIDATION

There are 4 major benefits to credit card debt consolidation:

  1. Personal loans and balance transfer credit cards [usually] have lower interest rates

  2. Consolidation allows you to pay off your debt quickly due to decreased interest rates and overall monthly minimum costs

  3. Credit card debt consolidation will help you save a crap ton of money
  4. You’ll drastically increase your credit score

Here’s some data to backup my claims:

1.  Personal loans & balance transfer credit cards have lower interest rates

The average credit card interest rate is a whopping 16.71% and can reach a height of almost 26% if you have poor credit.

Personal loans, on the other hand, can have interest rates as low as 5% and on average do not exceed 15%.

And, balance transfer credit cards often have 0% APR specials for the first year.

That is a major factor in determining how fast you’ll be able to pay off your credit card debt and also determines how many thousands of extra dollars you might spend in interest costs.

For example, if you owed $2,500 on your credit card and made your minimum payment of $65.00 each month, you’d end up paying $1105 in interest!

On the contrary:

If you took that same debt and consolidated it into a personal loan (with an average interest rate of 10%), you’d only pay $270 in interest.

Additionally, if you transferred your balance to a 0% APR credit card and paid off your balance in 1 year, you’d pay $0 in interest!

That. is. wild. — And exactly why I consolidated my credit card debt into a personal loan!

2.  Credit card debt consolidation helps you pay off debt in half the time

If you’re only able to make minimum payments on your credit card, it’s gonna take you hella long to pay it off.

For instance, that scenario we talked about in the last section, would take you 4.7 years to pay off if you only continued to make your minimum payments.

If you consolidated that debt, though, it would only take you 2 years to pay off your credit card debt.

Again, WILD!

As I mentioned, I recently consolidated my credit card debt into a personal loan and will be paying off my debt in half the amount of time (3 years instead of 6 years).

3.  Consolidation will save you a crap ton of money

As you saw in my examples about interest rates, consolidation your credit card debt with a personal loan or balance transfer credit card will save you hundreds, if not thousands, of dollars.

I am currently saving $3,000 since consolidating my credit card debt!

4.  Personal loans will skyrocket your credit score

Consolidating your credit card debt (specifically with a personal loan) will do 2 things for your credit score:

1.  It will lower your overall credit card usage

2.  It will increase your credit score

When you use a personal loan to pay off all of your credit card debt, your credit score will skyrocket!

The proof is in the pudding:

When I consolidated my credit card debt into a personal loan, my credit score increased by 50 points!

>> CONS OF CREDIT CARD DEBT CONSOLIDATION

I think we’d all agree:

Those are some pretty compelling pros to consolidating your credit card debt.

But, you might be wondering:

Is it too good to be true?

I’ll lay out some cons of credit card debt consolidation and let you decide!

  1. Consolidating your credit card debt into a personal loan or by using a balance transfer credit card opens up another line of credit on your credit score (however, while simultaneously bringing other lines of credit to zero).  This, to me, balances everything out.

While credit card debt consolidation may have some cons, it might be the best option for you if:

  • you have bad credit
  • your debt payments are taking over your life
  • you’ve been sued over your debt

If these things apply to you, here are the best debt consolidation options for you:

>> best Balance transfer options for consolidating credit card debt:

Not one credit card fits all when it comes to balance transfer credit cards.

This is my best advice when shopping for a new credit card to transfer your current balances to:

  1. Use a tool like CreditKarma.com to get an accurate portrayal of your credit score
  2. Use CreditKarma’s tools to shop around for the best credit card options based on your current credit score
  3. Only choose a balance transfer credit card that has a lower overall APR than your current credit cards OR is offering a 0% APR rate through the first 12+ months.

If you stick to those tips, you’ll have no problem finding a good fit for your credit card debt consolidation.

>> best personal loan consolidation options:

Accessibility to personal loans to pay off credit card debt is pretty great nowadays.

There are a few options that I recommend over others, though, for reasons related to interest rates and turn-around-times.

The options below have the best interest rates and can approve your loan in as little as 1 business day!

1.  PersonalLoans.com

  • Loans up to $35,000
  • 100% online application
  • Interest rates as low as 5.99%
  • Can be funded in as little as 1 business day

When you request a personal loan with PersonalLoans.com today, you can review your options for FREE with NO obligations!

2.  The Loan Exchange

  • Loans from $7,500 to $100,000
  • Interest rates as low as 16.64%
  • Same day approval + funding

 

3.  Cash Advance

  • A great resource to connect you with a network of lenders best suited for your loan requirements
  • FREE service
  • Use to shop around for the best interest rates

4.  Bad Credit Loans

  • Loans up to $5,000
  • ALL credit scores welcome – Works with a national network of lenders who have experience with applicants with poor credit
  • Quick loan request decision

I’ve personally used PersonalLoans.com to fund my credit card consolidation loan and couldn’t be happier with the results.

Pay off debt. Budget like a boss. Reach your financial goals.

If you’re looking to pay off your credit card debt quickly (who isn’t?), getting a personal loan or a balance transfer credit card is a great choice.

Like I said, personally, I’ve saved over $3,000 in interest costs and cut my payback time in half when using a personal loan from PersonalLoans.com

When you visit PersonalLoans.com right now, you will receive a FREE loan consultation!

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DESTROY THAT DEBT!

– michelle

P.S.  Was this post helpful?  Consider buying us a coffee to show your love <3

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MORE GOOD READS…

Planning For Your Financial Future

When you are young, life seems to last forever and every bit of money that finds its way into your pocket is for spending. Money quite often flows through our lives without stopping for much of our youths.  But we live in times of such big financial changes, it...

read more

4 Methods To Get Out Of Debt Fast

2020BUDGET BOSS planner2020BUDGET BOSS plannerGetting out of debt can feel like an impossible task. That is until you use one of the best methods for paying off debt quickly. When I used one of these four methods to pay off my...

read more
Master Your Money Super Bundle 2019
What's inside the Master Your Money Super Bundle

TOTAL VALUE: $1206.41

ACTUAL PRICE: ONLY $49!

Free Budget Boss eCourse!

Never wanna stress about money again?  Sign up now for your 5-day budget eCourse that will transform your finances.  (With Printables)

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