‘How Can I Reduce My Debt?’ Get Some Answers

by Gray Peters

There’s almost no stress that weighs more heavily on a person’s mind than the worry caused by excessive debt. It’s an interesting thing to observe what debt does to a person’s psyche – it crushes their creativity, nearly eliminates their ability to set goals and dream about a better future, and it can even damage a person’s physical health. What it all comes down to is that debt is bondage; it’s a form of self-inflicted slavery from which everyone who’s in it wants to escape. Don’t worry – if you’re sitting there saying “Yes, but I have no idea how to reduce my debt,” there’s hope. It’s not going to be an easy path, but you can absolutely get there.

First we should talk about the traditional methods for getting rid of debt. One of the most popular in the world is called the snowball method, and it boils down to attacking one piece of debt at a time until you’ve eliminated all of it. For example, let’s say you’ve got two credit cards, a car payment, and your mortgage payment. One credit card has a balance of $10,000 and the other has a balance of $5,000. You owe $12,000 on the car and you have a remaining balance of $250,000 on your home. If you approach this process the right way you can end up paying it all off within 7 years or so, and live debt free for the rest of your life.

You’ll start with the smallest debt – the $5,000 credit card balance. Dig into your financial situation and find an extra $100 or so per month. Apply that $100 per month to your credit card balance, and combine with your monthly minimum payment. Your total payment will probably be in the neighborhood of $200 or $250. It will take nearly two years, but you’ll be rid of that credit card balance. When you’re finished, take the entire payment you’ve been making to that credit card, combine it with the monthly minimum payment you owe on the next credit card, and you’ll pay it off a lot more quickly. Continue with this process on the car and your house, and the next thing you know (a few years later), you’ll be debt free and loving life.

The snowball method is one of the most famous and popular solutions for people saying “I want to know how to reduce my credit card debt.” If you discipline yourself to find the extra money in your monthly budget, apply it aggressively to one debt at a time, and stick with the plan for a few short years, you’ll enjoy total debt freedom for the very first time. I promise you nothing could ever feel better than knowing that you owe nothing to no one. Good luck, and hang in there.

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