Getting yourself into debt is extremely easy but also very hard to get out of. Reducing and paying off debt can be stressful if you don’t have the right plan in place. When you begin to pay off debt, it’s important to put yourself in a stable financial position. City Credit Union knows the importance of reducing debt and has many different options to help you pay off those balances. Every person who starts paying off their debt often combines different strategies to get rid of bad debt and here are three ways to help reduce debt.
1. Increase Monthly Payments
Consistently paying off minimum balances on your debts will take way too long to get out of debt. If you are paying the minimum balance only, by the time you finally pay off the balance, you will probably pay at least double what you originally were charged. To avoid paying double, increase monthly payments every month. Create a debt-repaying strategy that establishes a plan to make large payments on a single credit card.
2. Ditch Expensive Habits
When you get your bills every month, do you find yourself coming up short for cash? Start by evaluating your spending habits and see where you can cut costs. This gives you the power to decide whether a purchase is worth it or not and often times will help you get rid of those extra expenses each month leaving you with extra money to pay off those other bills. Instead of spending money on coffee every morning, add the few dollars into a checking account at City Credit Union.
3. Build an Emergency Fund
Even if you are trying to pay off debt and not put money elsewhere, an emergency fund can keep you from creating more debt by creating a space to put any extra money into instead of using a credit card when an emergency arises. Ideally, an emergency fund should have enough funds to cover six to twelve months of living expenses but start by focusing on reaching a small amount first like $1,000. City Credit Union has a savings account that is a bank account to put emergency funds in while earning quarterly interest. Start saving now by visiting our website.
It’s easy to live in debt if you don’t ditch the spending habits. Instead of living paycheck-to-paycheck, start setting money aside in a City Credit Union bank account to help create extra funds to pay off debt. To learn about all the different accounts City Credit Union has to offer, visit our website or call us at 816-252-2415.