Simple Strategies for Paying Down Debt

Planning your financial future involves many small steps that, when combined, create a huge impact. If you’re currently focused on eliminating debt, this article demonstrates 3 simple strategies to make it happen.

Ready to learn more? Keep reading to uncover all the exciting details, including how to create a budget and utilize balance transfers.

The importance of paying down debt

Think of your wallet the same way you do a teeter-totter. Each side, consisting of income and expenses, fluctuates higher and lower routinely. The fewer outgoing payments you have, the more you can use your money toward retirement or emergency savings. Additionally, the quicker you are at paying down debt, the less you’ll pay in fees from loans and credit cards.

Whatever your financial objectives, reducing your overall debt can go a long way toward helping you achieve monetary success.

1. Create a budget

The first step to paying down debt is to create a budget. Numbers don’t lie; however, most people have trouble seeing their financial situation as it is. To clearly tell if your budget is sustainable, you must start by listing your expenses. You can use this related article about categorizing personal expenses as a guide.

Once you have your monthly expenses, compare the total against the amount of income you earn. Is there enough coverage? Do you have opportunities to save? If you have answered no to either question, reducing debt should be a priority.

2. Utilize balance transfers

A balance transfer is a way to move debt from one loan holder to another. People with multiple credit cards often do balance transfers to reduce fees or simplify their monthly billing.

For instance, transfer your balance from any card to the Achieva Cash Rewards Mastercard and get 0% APR* until December 2024!

After the introductory period has ended, the standard APR of 12.49%-25.49% for balance transfers, purchases, and cash advances will apply, with the rate based on your creditworthiness. You’ll pay one monthly fee instead of the multiple cards you were once used to, making budgeting easier and faster.

• Applies to transfers processed between February 1, 2024, and May 31, 2024.

• The balance transfer fee is 4.0% of the transaction with a $20 minimum.

After all is said and done, a balance transfer is a great way to streamline your expenses and have more control of your finances.

3. Take a shopping pause

Declaring a no-spend holiday over your budget can work wonders in a short period. Imagine not impulse buying for two weeks and experiencing extra money left over in your account at the end of the month. It’s a great feeling, and we’re here to inspire you towards it.

To be successful during your shopping pause, make sure to set a specific timeline. Focus on free or low-cost alternatives, such as cooking at home, borrowing books from the library, or going for an evening walk in the park. By the end of the no-spend holiday, you’ll likely feel a sense of accomplishment and understand your spending habits better. You can then use the money you saved over the holiday toward paying down debt.

Bonus: Paying down debt could help your credit score

Before we leave, we would like to drop an added bonus. Did you know that paying down debt could help your credit score?

In general, when you have less debt in relation to your income, lenders view you as less of a risk. The result is usually access to better credit offers and interest rates. We explain why credit matters here, plus supply other practical tips for determining a good credit score.

Need more financial content? Continue following the Achieva Life Blog for additional budgeting and lifestyle articles.