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3 Simple and Effective Ways to Reduce Your Debt

If you have debts, it feels as if you never clear up the outstanding balance and return to normal. Although you will never really make a big dent in your debt without making large payments for it, there are some smaller baby steps that you can take to start reducing your debt without fully depleting your bank account in the process. Here are three tips for tackling your debt and getting used to making regular debt-breaking contributions to the outstanding balance.

 

Round off your account balance

This can be an easy way to build up a separate amount to pay your debts. The basic idea is to keep your daily bank account at a rounded amount, such as $ 240, and transfer something above it to a separate savings account. For example, if your account balance is $ 246, 47, you can either overwrite $ 1, 47 to complete the balance to $ 245, or $ 6, 47 to complete it to $ 240. It may seem that it’s a while takes time to build savings with this method, but you will be amazed at how quickly I have been using this method for over a year now and scraped an extra $ 300 last year by simply finalizing the balance in my daily account and sending it to a separate savings account. In the very first part of 2010 alone, I picked up $ 30. I always keep a fixed amount on my daily account to cover my regular outgoing expenses and have a little extra in case it is a bad month. I never exaggerate my account and I can honestly say that I don’t miss the money. When you have put together a good amount, such as $ 50 to $ 100, use this to make a payment on a credit card or loan and start again. It will give you the habit of consistently abolishing your debts.

 

Save loose change

Rinsing away your loose change is another way to build up money without feeling the effects too much. I often notice that I spend loose stuff that I don’t need and would not normally buy with my bank card, so this is a double saving for me. You do not have to save all your change, but even small coins can add up during the year. I try to put all my loose change in a can and pack it at the end of the year to pay at the bank. Then I apply all the money saved from the loose change in debt that I owe.

 

Make regular payments

In addition to the above tips and tricks, you can also make daily, weekly or monthly payments for credit card debts. You can choose to pay a small amount each day, for example $ 2 per day, or pay the equivalent of this on a weekly or monthly basis. This will slowly reduce your outstanding balance, but more importantly, you will get into the habit of making regular payments to your debt.

What works for you? Are you disciplined enough to pay your debt without saving bit by bit? We would like to hear your feedback about paying off debts.

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