Here’s your path to being debt free by the time 2022 comes to an end.
- You may be starting off the new year with debt for a host of reasons, from unplanned bills to holiday spending.
- If you want to be debt free by the end of the year, it pays to make your debt less expensive, spend differently, and boost your income.
If you’re starting off 2022 with a pile of debt, you’re no doubt in good company. There are lots of reasons why people end up in debt. Perhaps you were hit with a costly home repair in late 2021 that your paycheck couldn’t cover. Or maybe you gave into peer pressure and overspent on the holidays.
Either way, the sooner you pay off your debt, the less it’ll cost you. And if your goal is to be debt free by the end of the year, here are some key moves to make.
1. Find a more cost-effective way to pay off your debt
If you racked up balances on some of your credit cards, then you’re probably paying a lot of interest on your debt. In that case, finding a more efficient way to pay off those balances could not only save you money, but make your debt easier to eliminate.
One good option to look at is a balance transfer, where you move your different balances onto a single credit card with a lower interest rate attached to it. You may even qualify for a 0% introductory APR.
You can also consolidate your credit card debt with a personal loan. A personal loan lets you borrow money for any purpose, and you’ll generally pay less interest on one than what a credit card will charge. If you owe $5,000 on credit cards charging an average interest rate of 18%, moving that debt over to a personal loan charging 8% will result in some savings.
Finally, if you have a lot of equity in your home, you could borrow against it via a home equity loan or line of credit and use that money to pay off your debt. As is the case with a personal loan, you’ll generally pay less interest on a home equity loan or line of credit than what your credit cards will charge you.
2. Rethink your spending to free up cash
Making your debt less costly to pay off is a helpful move …….