Erasing debt does not have to be difficult.
In fact, keeping it simple is the best way to ensure you are successful.
Here are 3 Ways to Simplify Erasing Debt.
1.
Automate It Automate as much as possible your bill payments every month.
Set up a bill pay service online through your bank.
If you find that some of your monthly bill amounts are exactly the same month-to-month (cable or satellite service would be an example) have that same amount automatically set to be paid on the same day each month.
This takes some of the burden off of you to do it the old fashion way (via snail mail), no need to write a check, and you do not have to think about it.
Most credit card companies also allow you to pay online and have the monthly amount that is due automatically deducted out of your checking or savings account.
Be careful of this option if you are way behind on your credit card bills.
Meaning if you owe thousands to a credit card company and are more than 60-days late, do not use this option.
With your bank account info in their system there's nothing stopping them from deciding on their own to pull out everything you owe them leaving your bank account with no money left in it.
Though I have not heard of this happening personally, I would not put it past a credit company to do this.
In addition to automating the paying of your bills, set up automatic savings too.
Channel your money to automatically go from your paycheck to your savings accounts and investment accounts.
You always hear the experts saying to "pay yourself first.
" But let's be realistic, when you are deep in debt or trying to get out of it, paying yourself first is the last thing to ever happen.
And sometimes it does not happen at all.
But once you are on a path to paying off debt, or you are completely debt-free, then this is the next best step.
Funnel x-amount of dollars each and every month into your savings account.
Sometimes you can have your company automatically do this for you if you have direct deposit.
Sometimes your bank's online site can arrange to have funds auto-transferred from your checking to your savings account(s).
By doing it automatically, you do not have to think about it, it will just get done.
And like money that gets diverted for 401k savings, you probably won't miss it either.
2.
Eliminate the Low Hanging Fruit Eliminate low hanging fruit means to erase your smaller debts first.
Say you have 10 credit card debts that you want to eliminate.
In the amounts of $50, $250, $500, $750, $1000, $2000, $3000, $5000 and $10,000.
Knock off your smaller debts first as quickly as possible.
In this case the low hanging fruit would be the 4 debts of $750 and less.
Maybe even the $1000 debt.
But if you target your debt repayment to erase those in order of smallest to largest, you could probably eliminate all of them in a matter of months.
This should give you a huge feeling of satisfaction and the mental will power to go on.
Whereas if you instead start by targeting your largest debt, in this case the $10,000, it could take years to pay off.
Giving you the feeling that your plan is not working.
And for most people the chances are they will give up because it feels like it is not working.
In the two examples above, which would feel better to you after being on an erase debt plan for one year: a.
You eliminated 5 of your 10 debts or b.
You still have all 10 debts remaining.
For most people, myself included, option a feels a lot better.
3.
Keep Your Budget In Plain Sight Keep your budget where you can see it almost on a daily basis.
This does not mean you have to study it every day.
But it needs to be readily visible and a reminder that you have it.
Or at minimum, keep a list of the debts you need to pay off in plain sight.
You may want to post these on your refrigerator, in your pantry, next to your bathroom mirror, near your desk, or anywhere you can see it on a regular basis.
Face it, out of sight and out of mind.
If you do not train yourself to go back to your budget regularly, then at some point you will stop using it.
By keeping it handy and easily seen by yourself then there is a good chance that you will stick with it.
If you are embarrassed that friends and family may see it when visiting then definitely keep it in your bedroom or a room that guests would probably not go in but that you do go into on a regular basis.
So by following these 3 tips to simplify erasing debt - keep your budgeting simple, target the low hanging fruit and keep you budget in plain sight - will help to keep you on track to erase debt and build wealth.