Get Out of Debt the Right Way

Many Americans today struggle with debt. In fact, according to a 2019 report from CNBC, the average American has about $38,000 in debt—and that’s not even accounting for mortgage debt. If you're one of the many people who are struggling with debt, you might be looking for ways to get out of it as quickly as possible. However, it's important to make sure that you're doing it the right way. Here are some dos and don'ts for getting out of debt.

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Do...Set Up a Debt Repayment Plan

One of the first things you need to do when you're trying to get out of debt is to set up a repayment plan. This involves figuring out how much money you need to put towards your debt each month in order to pay it off within a certain timeframe. It's important to be realistic when setting up your repayment plan; if you try to bite off more than you can chew, you'll only end up frustrated and may even end up further in debt.

Don't...Ignore Your Debt

When you're struggling with debt, it can be tempting to simply ignore it and hope that it goes away on its own. But that's not going to do anything except make your situation worse. The sooner you face your debt head-on, the better off you'll be. Make a budget and figure out how much you can realistically put towards your debt each month; then, start making those payments.

Do...Look Into Debt Consolidation

If you're struggling to make payments on all of your different debts each month, consolidating your debt could be a good option for you. This involves taking out a new loan—usually at a lower interest rate—to pay off all of your other debts. This can help reduce your monthly payments and make it easier for you to get out of debt. Just be sure that you shop around for a good interest rate before consolidation; otherwise, you could end up paying more in interest in the long run. A few strategies to consolidate include debt:

Consolidate with a personal loan

Tap home equity

Get a 0% APR credit card

If you're struggling with debt, there are a few things that you can do to try and get out of it. By setting up a
repayment plan, looking into debt consolidation, and facing your debt directly, you can know how much money you
need to put towards your debt each month, pay just one monthly payment instead of multiple, and settle your debt once and for all.