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Take Control of Your Money With a Debt Payoff Planner

For a great deal of us, financial security doesn’t occur at random. We have to work at it, and like any other meaningful endeavor, you need to have a plan. Decreasing your debt is an essential part of creating a successful financial future, and without a debt reduction planner, it will be difficult to reach your goal. Here are some crucial steps you can take today to create your own debt freedom plan.

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Make a Realistic Monthly Budget. You can’t pay down debt if you don’t keep track of you’re spending each month. List every item — and we mean each and every one — that you spend money on. This involves all the obvious things like your rent or mortgage, car loan, gas, food, utilities and entertainment. Where many budgets go off the rails is when people fail to account for “other” spending. This includes the occasional but indispensable costs, like the auto insurance you pay quarterly instead of monthly or taking your dog to the vet, and less essential things like snack foods from the convenience store when you’re filling up on gas.

Inventory Your Debts. How much is owed on your house? How much is outstanding on your car loan? Are you still paying off last summer’s family vacation or perhaps Christmas presents? Again, it’s the items you overlook that will cause you to stumble. When you account for everything, the total may shock you. Don’t be daunted! Use the size of the mountain as incentive to summit and conquer your obligations.

Find Money in Your Budget to Pay Down Debt.  Now that you know the essentials, get serious. If there were a lot of extra cash sloshing around in your budget, you probably wouldn’t have much debt. You need to find ways to cut costs or increase income (hopefully both). Then be laser focused about utilizing the extra money to pay off debt. Whether you use the “snowball” method or just pay off the high-interest debt first, you need to direct all available firepower on the enemy if you’re going to reign victorious.

Look at Biweekly Payments to Conquer Debt Faster. The traditional folk song says it best: “We worked through spring and summer / the winter and the fall / but the mortgage worked the hardest, and the steadiest of us all / it worked on nights and Sundays / and it worked each holiday / it settled in among us and it never went away.” Your home mortgage is probably your largest single debt. Afterward, it’s likely your car and/or student loans. Larger, long-term debts like these can often benefit significantly by reduction and faster payoff using biweekly payments.

Here’s how you can do it: Instead of paying the normal monthly mortgage payment, you’ll pay half that amount every two weeks instead. The extra money gets applied to and helps reduce principal on the loan. And because interest is charged on the outstanding balance, the lower that balance, the less you end up paying in the long run. For instance, if you borrowed $300,000 to buy your home with a 30-year mortgage at 4%, using biweekly payments would save you over $33,000 over the life of the loan — and you’d pay it off more than four years earlier!

Use these tips to create your own individual debt reduction planner. The first step in defeating debt is knowing exactly how much of it you have and what resources you need to pay it off.

AutoPayPlus can help you pay down debt sooner. Withdrawals from your account every other week sync conveniently with paychecks and your monthly budget, while an extra half payment twice a year applied toward principal lessens interest over the life of the loan. Please visit this website www.autopayplus.com to learn more.

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