Clean Out Debts | Best Ways to Cut Down Your Dues

As Spring comes into full swing, you are likely looking towards different ways you can lighten up your expense load to be able to enjoy everything the warmer seasons have to offer. However, the steps can be confusing when it comes to deciding what the right moves are to cut down the most, and how much to cut down. Keep reading to learn more about the top tips to start cutting down your dues.

Talk With Your Partner to Create a Plan

Communication is the key to good understanding in relationships, and talking through your finances is no different. The odds are that you both have your fair share of different debts that are to be tended to each month, and the first step to replanning how to cut them down is to talk about it.

This is a perfect time to reevaluate how much you each still owe, how many different outlets you are paying to, which take top priority, etc. The idea of dividing and conquering is a great skill to use now.

Which Debts You Should Pay First

Now comes the age-old question - which debts should I be paying first?

This can go a variety of different ways, and they all come with their own pros and cons. The best way to decide which route to take is to see which one reflects best on your priorities.

Pay off your highest debt first - this option is great for those looking to avoid any high interest from a larger loan that could add up over time. By tackling these loans first, you are left with smaller loans that are likely adding a much smaller amount of interest. This debt could also take the longest to pay off due to the higher interest, so it’s important to not get discouraged by nonimmediate results.

Pay off your smallest debt first - this option fits well with those looking to see immediate results, as it is easier to pay off than your larger debts. This method also tends to keep people motivated and stick with their debt payment plan because of the progress they are seeing. This process also helps you with the snowball effect on your loans/debts. It’s important to remember from the first option that your larger loans will be gathering more interest while you prioritize your smaller debts.

Pay off debts using a balanced method - this debt repayment plan gives more freedom to tackle the amount that you owe, however without a clear plan it can be easy to lose motivation or fall off a plan that hasn't completely been created. If you are looking to prioritize your debt repayment based on what your life currently allows, this could be the way to go.

Create a Monthly Budget

So you have created a plan that works best for you and/or your family, now it’s time to apply the plan to your monthly expenses. Based on the option that you picked, it could be that you are applying a certain percentage from your income to dedicate to debt payments, or using extra roll-over funds to pay for debts that are relevant or necessary for your current situation.

Whatever your plan may be, remember - staying dedicated to your process will help you reach the results you are looking for.