As we approach a brand new year, you have the chance to renew your commitment to pay down debt. By the time December (with its holiday spending) rolls around, it’s common for the debt repayment plan to kind of fall to the wayside. Now, though, you can re-commit, and create a plan to boost your efforts.
If paying off your debt is your main concern, make that goal the centerpiece of your 2013 budget. Not only can you get your finances back on track, but you can also improve your life as you pay down debt.
Boost Your Debt Pay Down Efforts
One of the best ways to improve the chances that you will actually keep your New Year Resolution to reduce your debt is to write down a realistic plan. While there are stories of those who go to extremes to get rid of their debt, it isn’t very likely that you will be able to pay off $15,000 in credit card debt in six months.
Look at your situation, and then create a realistic plan. Your realistic plan for improving the way you pay down debt can include:
- Go through your budget and identify waste. Financial experts say that most households waste between 10% and 15% of their incomes each month. Identify that waste.
- Make a plan to recapture that waste, and put it toward paying down your debt.
- Look for ways to earn more money. Put together a plan for working on a side business, or working overtime, or selling things you don’t want anymore. This can provide you with extra money to put toward your debt reduction.
- Create a game where you try to find small savings each month to add to your debt reduction efforts. This can reduce your debt by a significant amount over time.
Now is a great time to create a debt snowball to help you pay down your debt. Organizing your debts and paying them off in an organized manner can be a great way to stay on track.
You can stick with your plan to pay down your debt with the help of a realistic plan that steps up your efforts. Rather than trying to put $500 a month toward debt reduction at first, make a plan to increase what you put toward your efforts a little at a time. Start by putting $200 a month toward debt reduction. Then, while you do that, spend a couple of months freeing up another $100 so that you are putting $300 toward debt reduction. You can keep stepping up your efforts until you are putting $500 — or more — toward your efforts. Once you get in the habit of looking for ways to improve your performance, it becomes second nature, and doesn’t feel like a sacrifice at all.
Even if you have had struggles in the past, you can make it a New Year Resolution to pay down debt. A new year means a new beginning, and that means that you can start over again and improve your financial situation. Start your debt repayment efforts over again in 2013, and improve your life.