When you look at the stack of bills on your desk (or in your email inbox), do you feel confident in paying them off? Or, are you like many Americans who feel that their personal debt is overwhelming?
Copper State Credit Union wants you to be able to own your debt-free plan with simplicity and peace of mind. In other words, we desire for you to feel capable of paying off your loans and getting out of debt. That freedom is possible with the right strategy.
Where To Begin
Before you go about paying down your debt, you want to know how much you have and what is most beneficial to pay off first. Here are five quick steps to help you assess your debt:
- Collect and list out all of your current debts, including personal loans, lines of credit, credit cards, mortgage, vehicle loans, student loans, store cards, etc.
- Determine the total amount of debt you have. This is important as you consider debt consolidation options and look at your debt-to-income ratio.
- Calculate how much of your monthly income you have to pay against your debts. First, subject things like groceries, gas, insurance, electric and other necessities.
- Go back to your list of debts and write down the Annual Percentage Rate (APR) you pay in interest every month to see which debts are costing you the most to keep open.
- Focus on paying more than the minimum monthly payment, whenever feasible. This helps you to stay ahead of mounting debt and make steady financial progress.
As you determine your best approach, we recommend reading our helpful article: Building a Budget That Fits. It will help you track your spending and plan ahead with confidence.
Finally, if you feel daunted about building a proper strategy, consider reaching out to a reputable, free credit counseling service. One such resource is takechargeamerica.org.
Did you know that you can call your lenders and ask about reducing your debt? You might be overlooking a great refinancing option, an on-time payment record may inspire them to lower your interest rate or you can find out about other debt-reduction options. It doesn’t hurt to ask!