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Pay Off Debt the Right Way
BFG offers you a step-by-step approach to pay off debt the right way
Debt can be a burden on anyone, and learning the best way to pay off debt is a major goal for all consumers. There are many different ways to approach the situation, and not all of them make sense in all scenarios. However, a common sense step-by-step approach will make a world of difference, and learning it can be the key to a brighter financial future.
Make a Game Plan: Trying to pay off debt without a true plan is a recipe for disaster. The first step is developing that plan, and treating it as an ironclad solution, not merely a suggestion or a guideline. Be sure to gather all of the specific information involving debt, budgets and incoming money.
Utilize Budget Tools: A variety of budget tools are available online today, and will perform all of the calculations and keep convenient track of all of the variables that are necessary. This will make it much simpler to make specific adjustments to spending habits, adjust bill cycles, keep track of expenses, and more. Find a budget tool or budget planner that seems like a good fit and start putting it to use.
High Interest Debt First: In almost all instances, it makes more sense to pay off the highest interest rate debts first. Simply put, interest is wasted money, so when consumers can get rid of the biggest wastes, that makes the most sense. Some consumers may prefer to knock off smaller debts first, even if they don't have the highest interest rates. This is sometimes more of a motivating factor to help build on success, and if that's necessary, utilize it.
Consolidate: Consolidating multiple high interest accounts into one lower interest account can save hundreds or even thousands of dollars. Don't fall for any of the infomercial scams, though. Consider low interest personal loans, or low interest credit card balance transfers, but be sure to understand any and all associated fees (e.g. balance transfer fees, application fees, introductory rate rules, etc.) to make sure the move actually saves you money.
Stop Spending: If somebody wants to pay off debt once and for all, they have to stop accumulating it! Stop using credit cards unless it's an absolute emergency.
Rewards: Using a budget tool and creating strict limits, and working hard week to week and month to month to pay off debt can be daunting. There needs to be a tangible reward at the end of this journey, or at points along the way, to keep motivation high. From small indulgences, to saving up for larger splurges like vacations, build in a reward so there's a light at the end of the tunnel.
BFG Federal Credit Union provides a variety of budget tools, tips and helpful services to assist consumers with the goal of learning how to properly pay off debt. Along with the value driven checking and savings accounts, debit and credit cards, and low interest rate loans that BFG Federal Credit Union provides, it's easy to see why they have such a strong reputation all across Summit County, Ohio. Learn more at BFGFCU.org and access their budget planner and other budget tools.