The best ways to pay off your financial debts

Know what to do to reduce your debts.

12:20 16 August 2014

While rapidly paying off debts is not practical for everyone, slight changes in your approach towards your debts can however massively enhance your financial position. 

 

Student Debt

 

Every college bound student has the objective of attending an exclusive university. They are however slapped with (unnecessary) excessive bills in the long run.

 

How to approach student debt:

 

Consider starting your career at a less expensive community college. If you are already repaying your student debt, write to your lender requesting them to apply any monthly overpayments exclusively towards the reduction of your principal loan and not on the interest accrued. When you pay more than the minimum monthly loan amount, you may not realise the desired outcome as lenders are likely to apply the overpayments towards paying the interests as opposed to reducing the loan principal.

 

Keeping up with the trend

 

Wishing for the latest car model or the most awe inspiring gadget is not all bad by itself. However, splurging into thousands of pounds worth of debt in the quest to remain trendy is worrisome. You will get what you wish for but struggle to carry that debt burden. 

 

How to keep up with trend

Open a separate savings account to cater for optional expenditure. This should take just a small percentage of your income to enable you stay in style without crossing the line.

 

Credit card debt

 

Responsible credit card users experience low interest rates in their loans which translate to more money saved. Many cardholders are however overwhelmed by purchases. Even the most duteous shoppers will occasionally forget how much of the credit they have used over the month. They get shocked, though, when the time for clearing the credit balance comes.

 

Do not spend more than you can on your credit card. 

When you know you have made extra purchases on your card than usual, make haste and use your phone to pay off the extra purchases.