(WFSB) – Experts say consumer debt hit a record high in 2020.
If one of your goals in the new year is to pay it off, taking small steps can help you reach that big goal.
The first thing to do is make a budget.
“You have to know what’s coming in and what’s going out, and you have to make cuts,” said Catey Hill.
Once you do that, Catey Hill will Millie Magazine says you can find ways to cut, and don’t overlook things like car or homeowner’s insurance.
“Homeowners insurance, switching it, you can save anywhere from $300 to some people saved $1,000 a year for switching their policies for the same coverages. You don’t want to cut your coverage levels, but there is so much competition in the market,” Hill said.
Just one phone call you lead to savings and that will free up money to pay down your debt.
When you’re prioritizing what you pay off, list your loans in order of interest rates. You can either pay off the one with the lowest balance first or attack the one with the highest interest rate.
You can also look to transfer a zero-balance card to save money.
“When you’re not paying interest, that will lower your payment significantly. You can pay off that debt and then work on your other ones too so it’s certainly something to consider if you’re feeling overwhelmed with your debt,” Hill said.
Also, buckle down by making it harder for you to spend and divert all that cash to your debt.
“Build a wall I guess in between you and your buying,” Hill said. “It’s too easy to spend money now, your payment information is in all the websites, you can just buy now. What happens when you can buy now, you do buy now.”