How to reduce your debt without stress

August 22, 2018
Reducing your debt can be extremely stressful, but it does not have to be so worrying. One way to avoid worrying about paying off your debts is to put the process on “autopilot” as much as possible. If you do not build any more debt, then you can focus on reducing the amount of money that you owe. Furthermore, when you create the right strategy, any extra contributions that you make to your debt reduction will feel like victories and could increase your personal finance confidence overall.
How to reduce your debt without stress

The first step

The first step is to set up automatic payments on all your loans. You can create a system using your card or bank account management sites to make automatic payments each month on the due date. These payments will be paid even if you forget to do it manually.

You can then see how long it will take to pay down your loan using the minimum payments. Do not worry if you find that it will take a long time. This is only the first step in the process.

How to find “extra” money

The second step is to find “extra” money to make additional payments. How can you do this? You can try to find ways to reduce spending. This could be as simple as skipping the coffee shop and making coffee at home each morning. Or, you could purchase generic brands instead of name brands at the store. Every time you reduce costs, you will be saving money that you can put towards making a second monthly payment on your debts. Every little bit helps because it will reduce the amount of time until you pay off your debts.

Plan for emergencies

The biggest problem as you move towards a debt-free life is almost always unexpected financial emergencies. These will happen to nearly everyone at some point. While it is impossible to protect yourself from these expenses totally, you can take steps to prepare for them ahead of time. For example, you can start a small emergency fund that can help with these costs when they arise. And you can research online personal loans, which can help cover extra costs until you get your next paycheck.

The advantage of online personal loans is that you only need to borrow what you need. This is unlike bank personal loans, which may have a high minimum amount. Unlike credit cards, you cannot make repeated purchases with online personal loans, so it is easier to control debts.

Stay on target

You can also use your “finding extra money” strategies to get extra money to create a savings account that you can use to make any additional purchases or cover emergency expenses. Just like debt reduction, every little bit of money helps when you are creating a savings account.