If you often find yourself short of funds before payday or unable to make more than the minimum payment on your credit card, you may need a debt strategy. Here are some tips to help you get out of debt faster.
Once you have your balance sheet, make a list of your income and expenses. You need to know how much income you can put towards your debt.
Coming soon: see your transactions grouped into categories in your online bank. This will make it easier to decide which expenses are essential and cut out the ones that aren't.
Determine which of your debts are an investment (like a mortgage) and which ones are not (such as credit card debt or a car loan). You should generally pay off the second type first.
Address debts with higher interest rates first. If the interest rate is the same, start by paying off smaller debts. Having fewer debts helps your credit rating.
Ensure you always make your minimum payments to maintain a good credit score. You can negotiate a payment plan with your creditors if you find yourself falling behind.
If you have more than one credit card, save on interest by consolidating your balances to the card with the lowest rate. Put extra cash towards your debts rather than spending it.