Bills rarely come in nice clean whole numbers like $US100. They pile up on your desk with demands like $94.38, $294.38 and other decimal-toting figures. Rounding up your debt payments, even by a dollar, can yield surprising long-term savings.
It can be easy to get lazy about debt because the more it grows, the more we tend to avoid it. The problem is harder to run from when you know exactly how much that debt is costing you every month.
Some financial planners advise making two half payments on your mortgage each month instead of one full sum. The idea is that homeowners will save thousands of dollars over the years in interest payments. Does this idea hold water?
There are plenty of services offering to help get unmanageable debts under control, but a shadow shop by Choice suggests that most won’t offer an appropriate solution.
Almost everyone agrees that high-interest debt should be your main priority when allocating your extra cash, but in the midst of the recession, personal finance guru Suze Orman says emergency funds trump debt payback.
If you’re looking to shave down your debt, the “snowflake” method helps you relentlessly whittle your debt away with prioritized micro-payments.
For anyone trying to get their finances under control, identifying and then eliminating debts is a vital task. But are we always rigorous enough when we make that assessment?
Anyone who’s dealt with significant debt knows how difficult it is to write out a large cheque every month to pay it off. Instead, financial weblog FiveCentNickel suggests paying off debt in micropayments: In short, pay what you can afford, and then scrape together whatever else you can during the month and send in multiple, smaller payments… Believe it or not, [a friend]got to the point where he was sending Citibank an extra $5 each and every day via online billpay. By making a game out of finding an extra $5/day, he managed to stay motivated and slay the debt beast well ahead of schedule.
Avoid the harassment and hassle from debt collectors by taking away their power. Weblog Five Million Dots advises to divide your funds among entities you owe money to. This reinforces the notion that you are aiming to follow up on your end of the deal. Solidify that commitment by picking up the phone and calling the debt collectors to inform them that you’ve made a payment. As you continuously do this, the collectors will be less compelled to remind you about these expenditures as you are already on top of it. Additionally, if you’re being hounded by collectors, check out your rights when dealing with debt collectors. What are your best tips for dealing with debt collectors? Share them in the comments. Dealing with Debt Collectors – How to Take Away Their Power [Five Million Dots Blog]
