If you’re like me and have student loans, car loans, mortgages, or other types of debt, then you know how difficult it can be to manage your finances. When I found myself with a mountain of debt, I was determined to find a way to pay it off and raise my credit score. After six months of hard work and dedication, I successfully paid off $30,000 in debt and raised my credit score by 200 points. In this blog post, I’ll share the steps that enabled me to achieve this goal.
Step 1: Get Organized
The first step was to get organized. It’s important to know exactly what you owe and when payments are due. To do this, I created an Excel spreadsheet that listed all of my debts along with the interest rates for each one. This allowed me to prioritize which debts I wanted to pay off first – those with the highest interest rate were at the top of my list. By doing so, I was able to save money on interest payments over time.
Step 2: Create a Budget
Once I had all my debts organized, it was time to create a budget. This involved looking at my current income versus expenses and figuring out where I could cut back in order to free up more cash for paying down my debt faster. For example, instead of going out for dinner once a week with friends, we decided that it would be more cost-effective (and fun!) if we cooked dinner together at home instead. This small change saved us hundreds of dollars a month which we were then able to use towards our debt payments.
Step 3: Make Small Extra Payments Every Month
After creating a budget and cutting back on unnecessary spending as much as possible, it was time for the real work – making extra payments every month! Even though it may seem like an impossible feat when you first start out, making even small extra payments each month can make a huge difference in the long run. With every extra payment I made on top of what was required each month by creditors, my balance decreased faster than ever before! Plus the more consistent payments helped increase my credit score substantially over time.
Paying off $30K in debt is no easy feat but by staying organized and focused on my goals, combined with some sacrifices here and there along the way (hello home-cooked dinners!), it is 100% achievable! If you find yourself struggling under the weight of financial stress or if your credit score needs some help – don’t give up! Start by getting organized today so you can begin taking control of your finances tomorrow! Good luck!