{"id":65069,"date":"2021-02-08T17:38:09","date_gmt":"2021-02-09T01:38:09","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=65069"},"modified":"2023-09-22T14:52:24","modified_gmt":"2023-09-22T21:52:24","slug":"how-to-become-debt-free-in-4-easy-steps","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id65069-how-to-become-debt-free-in-4-easy-steps.html","title":{"rendered":"How to Become Debt Free in 4 Easy Steps"},"content":{"rendered":"

\"\"<\/a>If you’re paying off one or more debts, you’re probably sending off at least the minimum payment, or just a little more, each month. If that sounds like you, then you probably feel as though you may never get to that final payment; this can be especially true if your interest rates are high enough.<\/p>\n

With that in mind, it’s important to understand debt and the best strategy to pay it off as quickly as possible.<\/p>\n

Know What You Owe<\/strong><\/p>\n

The first step in getting rid of your debt is staring the cold, hard truth in the face. This means sitting down and looking at how much you actually owe. Get together your credit card bills, your student loan balances, information on your auto loan and any other debts that are outstanding. If you have a mortgage, you can set that aside for now since it is a little bit different from other types of debt and in some cases, it might be to your advantage to keep paying it off on schedule. Otherwise, make a list of what you owe, noting who you owe the most, and what the interest rate is on each.<\/p>\n

Refinancing and Balance Transfers<\/strong><\/p>\n

Both refinancing and balance transfers can reduce the amount of interest you’re paying. You can refinance your student loans with a private lender; this could mean that you’re paying less in interest each month, and it can also mean paying the loan off faster. For credit cards, look into offers for zero interest on balance transfers — but be careful with these because they’re usually only for a limited time, and the interest rate can be very high once that time is up. However, this can be a good way to save a lot of money on paying off your credit card bill if you are able to do it in the time allotted.<\/p>\n

Choose a Method<\/strong><\/p>\n

Rather than continuing to haphazardly throw money at your debts<\/a>, you need a mindful approach to paying them off. There are basically two ways you can go about this. One is to choose the account with the highest interest rate and focus the bulk of your efforts on that. For everything else, just make minimum payments for now. Once that high-interest loan is paid off, you can turn your focus to the one with the next-highest interest, adding what you were paying on the previous one to the minimum you were paying.<\/p>\n

This is the most sensible method in terms of saving money, but it can be hard for some to stick to if those high-interest loans take too long to chisel away at. If you need more motivation, you may want to apply this same method but instead order your debts by size. Paying off several small ones first can be invigorating and can give you the boost you need to stick with this process.<\/p>\n

Avoid the Same Mistake<\/strong><\/p>\n

To avoid falling right back into the same situation, create an emergency savings account<\/a>. This should be enough money to cover expenses for several months that you can access easily. In other words, it should be in a savings account or something similar and not tied up an investment. You can use this instead of credit for future unexpected expenses.<\/p>\n

Photo Credit: Stock Monkeys<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

If you’re paying off one or more debts, you’re probably sending off at least the minimum payment, or just a little more, each month. If that sounds like you, then you probably feel as though you may never get to that final payment; this can be especially true if your interest rates are high enough. […]<\/p>\n","protected":false},"author":36,"featured_media":39501,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[458],"tags":[],"class_list":{"0":"post-65069","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-credit-debt","8":"pmpro-has-access","9":"entry"},"yoast_head":"\nHow to Become Debt Free in 4 Easy Steps<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lenpenzo.com\/blog\/id65069-how-to-become-debt-free-in-4-easy-steps.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Become Debt Free in 4 Easy Steps\" \/>\n<meta property=\"og:description\" content=\"If you’re paying off one or more debts, you’re probably sending off at least the minimum payment, or just a little more, each month. If that sounds like you, then you probably feel as though you may never get to that final payment; this can be especially true if your interest rates are high enough. 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