With the holidays coming up, accruing some debt is not a surprise. So what do you do when it starts to spiral out of control? Pay it down, a dollar at a time!
Okay, so I am pretty sure you’re looking at this and saying ‘yeah, no duh genius.’
So let me explain… What I mean by dollar down debt is that you take your monthly expenses, find ways to cut a dollar here or there and use that to add to your monthly payment. An example, you ask? Why of course! So let’s say you are buying lunch today at work and you can pick between the large combo for $10 or the medium for $8. Now you might be super hungry but what does the large give you that the medium doesn’t? Usually, it is just a larger drink or larger side by a handful so are you really getting more for that money? So you opt for the medium and use that $2 to put towards that debt payment on top of the minimum.
Now, instead of just paying $50 for your minimum payment which will accrue an exorbitant amount of interest, you’re paying an additional $2. That doesn’t seem like a lot but if you can stash aside an additional $50 from analyzing your expenses and cutting back on some of those frivolous upgrades then you can double or triple your monthly repayment.
So you are literally knocking down your debt, a dollar at a time!
How do you save these dollars and not apply them to other expenses? Put them aside…literally. You can have a secondary account that you transfer the funds to if you aren’t using cash OR in the event that you are using cash, put them in a “debt jar”! Or you can always set up apps that help manage your funds and track your spending habits to help you squirrel away some money to help that debt dwindle down faster!
So inquiring minds want to know… What are you doing to pay down any debt? Do you have CC that you have a revolving balance on? Do you follow Dave Ramsey’s snowball or avalanche methods?