Debt Got You Down? Take These Tips to Downsize Your Debt in 2024

Anna Rue
Anna Rue

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Debt can be one of the biggest stressors in your life. If you have a lot of unpaid bills and backed-up loans, you can start to feel buried under a mountain that you don’t know how to dig your way out of. The good news is that it is not too late to start tackling your debt! The middle of the year is just as good a time as any to take stock of your money situation, review and update your goals, and get a second wind on your action steps.Do a thorough check of all your current debts. List out details like what kind of debt it is, how much you owe, how much interest has accumulated, and who services that debt.Now that you know how much money you owe, you can begin adjusting your budget to match your priorities. Make a list of the amount of money that you must spend each week and month, such as groceries, gas, etc. Make another list of the things that you can temporarily live without or cut back on, like daily coffee pickup, subscriptions to streaming services, or monthly salon appointments.You may need to temporarily take on an extra job or look for a different one that pays more. Think about your skillset and the opportunities around you. Could you start teaching music, art, or swimming lessons for the rest of the summer? Perhaps you could offer to do yardwork in nearby neighborhoods. If you know of a job opening at …

Debt can be one of the biggest stressors in your life. If you have a lot of unpaid bills and backed-up loans, you can start to feel buried under a mountain that you don’t know how to dig your way out of. The good news is that it is not too late to start tackling your debt! The middle of the year is just as good a time as any to take stock of your money situation, review and update your goals, and get a second wind on your action steps.
Do a thorough check of all your current debts. List out details like what kind of debt it is, how much you owe, how much interest has accumulated, and who services that debt.
Now that you know how much money you owe, you can begin adjusting your budget to match your priorities. Make a list of the amount of money that you must spend each week and month, such as groceries, gas, etc. Make another list of the things that you can temporarily live without or cut back on, like daily coffee pickup, subscriptions to streaming services, or monthly salon appointments.
You may need to temporarily take on an extra job or look for a different one that pays more. Think about your skillset and the opportunities around you. Could you start teaching music, art, or swimming lessons for the rest of the summer? Perhaps you could offer to do yardwork in nearby neighborhoods. If you know of a job opening at your place of employment or somewhere else, now is a great time to apply.
Now that you know how much debt you owe, you can start planning how to pay it off. You have two basic methods you can choose from:
The snowball method: If you want to see quick results, you can start by paying off the smallest debts first and gradually building up to the bigger ones. Getting rid of debts right away could be the motivation that you need to keep going, even when progress begins to slow due to needing to pay bigger debts in chunks.
The avalanche method: Start by working to pay off the biggest debts. This may take more time to see results, but you eventually pay yourself out from under the heaviest debts by getting rid of them first.
You may be able to negotiate with your creditors to see if you can reach an agreement to pay less than what you originally owed. The only types of settlements that creditors agree to are typically ones where they know the borrower won’t be able to repay in full. So, if debt collectors are calling you and you are delinquent on your payments, now might be a good time to call your creditor.
It helps to arrive with a proposal in place already. Suggest a repayment plan complete with monthly payment amounts. Coming prepared lets your creditors know that you are willing to do what it takes to pay a portion of your debt.
See if you can qualify to get a personal loan at a lower rate so you can pay off various other debts at higher rates. You can also find out if your credit score is high enough to qualify for a balance transfer credit card. This type of card lets you transfer your balances from other cards to a new one that has a lower interest rate. You may only have a certain window of time to use the balance transfer card before you are required to start paying some fees.
Refinancing your loans is a good option if you have student loans. If your credit is good, you are even more likely to access the lowest rates. Just be aware that refinancing a federal loan could make you ineligible for other federal forgiveness and repayment plan options.
While you’re dealing with your debt, LegalShield can give you access to the lawyers you need to protect your rights and educate you on your legal obligations. Financial problems can come with lots of legal issues. Whether it’s a billing dispute with a utility company, an argument with a home contractor, or a scary IRS audit, money problems create lots of stress. Get the legal advice you need to help handle financial fights with full knowledge of your rights. Your LegalShield provider law firm can write a letter, make a phone call, and may be able to help in other ways to protect your rights as a consumer.
 
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