How to Reduce Personal Debt?
People accumulate debt very fast but slow in reducing them. This is very common. If you have debts that you wish to clear, how would you approach them?
Here is what you can do (eliminate 1 loan as fast as possible)
1) Make a list of all outstanding debts (be exact and truthful).
2) Prioritize them according the outstanding amount with the smallest amount on top and the biggest amount below.
3) Focus on paying the one with the lowest outstanding amount. Pay the minimum on the rest of the other cards/loans.
What most people will do
I know that most people will pay the one with the highest interest or the one with the highest amount first.
After paying for some months, we may start slowing down in our payment as we did not see much success after paying for a long time. Our mind remembers the number of cards/loans that is outstanding but normally will not be able to remember the outstanding amount. That’s why most people will get tired of paying after a while. Thus they will be still in debt after many years.
Our human mind needs motivation and by reducing 1 card at a time will help to motivate our mind and this will create consistency in our actions.
Try this method and you will realize that
you will be able to clear off all your personal debt very soon.